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Financial Markets Conduct Act 2013

Governance of financial products - Governance of managed investment products - Management of scheme

169: Actuarial examination of defined benefit scheme or life benefit scheme

You could also call this:

"Checking the money in schemes that promise to pay a certain amount of money"

Illustration for Financial Markets Conduct Act 2013

If you are in charge of a scheme that promises to pay a certain amount of money to people, or a scheme that pays money when someone dies, you have to follow some rules. You must get a special person called an actuary to check the scheme's finances every three years. The actuary will write a report, and you must get this report within seven months of the examination date. You then have to give a copy of the report to the supervisor, or if there is no supervisor, to the FMA, as soon as possible, and if there is a supervisor, you also have to give a copy to the FMA within 20 working days after the supervisor gets it.

If you do not give the report to the supervisor or the FMA when you are supposed to, you can get in trouble and have to pay a fine of up to $50,000. This is considered a serious offence, and you can read more about it in subpart 5 of Part 8. The FMA is short for the Financial Markets Authority, and a life insurer is a company that provides insurance, as described in section 6(1) of the Insurance (Prudential Supervision) Act 2010.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM4091166.

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Part 4Governance of financial products
Governance of managed investment products: Management of scheme

169Actuarial examination of defined benefit scheme or life benefit scheme

  1. This section applies to a registered scheme that—

  2. is a defined benefit scheme; or
    1. provides benefits that provide for the payment of money on the happening of a contingency dependent on the termination or continuance of human life, and the risks associated with those benefits are not fully insured with a life insurer within the meaning of section 6(1) of the Insurance (Prudential Supervision) Act 2010 (a life benefit scheme).

      1. The manager of a defined benefit scheme or a life benefit scheme must ensure that a suitably qualified actuary examines the financial position of the scheme as at dates that are no more than 3 years apart.

      2. The manager must ensure that—

      3. the report of the actuary is received no later than 7 months after the date as at which the financial position of the scheme was examined; and
        1. the manager gives a copy of the report, as soon as practicable, to the supervisor (or, if there is no supervisor, to the FMA); and
          1. if there is a supervisor, the manager also gives a copy of the report to the FMA within 20 working days after its receipt by the supervisor.

            1. A manager that contravenes subsection (3)(b) or (c) commits an offence and is liable on conviction to a fine not exceeding $50,000.

            2. The offence in subsection (4) is an infringement offence (see subpart 5 of Part 8).

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