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Financial Markets Conduct Act 2013

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

171: Limits on reversion of scheme property in certain schemes to non-scheme participant contributor

You could also call this:

"Rules to protect your savings in KiwiSaver and other schemes from being unfairly given back to someone who doesn't belong to the scheme."

Illustration for Financial Markets Conduct Act 2013

If you are part of a KiwiSaver scheme, superannuation scheme, or workplace savings scheme, the people in charge of the scheme must follow certain rules. They cannot give any of the scheme's property back to someone who contributed to the scheme but is not a participant, unless the Financial Markets Authority (FMA) agrees to it in writing. The FMA will only agree if they think it is fair to the people in the scheme and that the scheme will still have enough assets to support everyone's interests.

The FMA must consider whether the scheme will have enough assets left after giving some back to the contributor. They must also think about whether giving the assets back is fair to the people in the scheme, considering how the scheme got those assets in the first place. You can find more information about this by looking at the Financial Markets Authority and other related laws, such as s 10 and ss 129B and 130.

The people in charge of the scheme have to make sure they are doing the right thing by the scheme participants, and the FMA has to make sure they are doing the right thing by everyone involved.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM4091169.

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

171Limits on reversion of scheme property in certain schemes to non-scheme participant contributor

  1. Neither the manager nor the supervisor of a registered scheme may permit any part of the scheme property of a KiwiSaver scheme, superannuation scheme, or workplace savings scheme to revert to a contributor who is not a scheme participant under the governing document without the prior written consent of the FMA.

  2. The FMA must not give consent to the reversion of any assets of the scheme to a person under this section unless satisfied that—

  3. sufficient assets will remain to support the interests of all of the scheme participants; and
    1. the reversion is fair and equitable to the scheme participants, taking into account the manner in which the scheme acquired those assets.

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