BNZ INVESTMENT SERVICES LIMITED PROSPECTUS BNZ KIWISAVER SCHEME

Transcription

1 BNZ INVESTMENT SERVICES LIMITED PROSPECTUS BNZ KIWISAVER SCHEME DATED 17 September /

2 CONTENTS DESCRIPTION OF OF SCHEME MANAGERS AND PROMOTERS REGISTRAR, AUDITORS, ADVISERS AND EXPERTS INDEPENDENCE OF OF KIWISAVER TRUSTEE AND CUSTODIAN KIWISAVER TRUSTEE DESCRIPTION OF OF SCHEME AND ITS ITS DEVELOPMENT SUMMARY OF OF FINANCIAL STATEMENTS GUARANTORS ACQUISITION OF OF BUSINESS OR OR EQUITY SECURITIES INTERESTED PERSONS MATERIAL CONTRACTS PENDING PROCEEDINGS OTHER TERMS OF OF OFFER AND SCHEME FINANCIAL STATEMENTS AND AUDITOR S REPORT PLACES OF OF INSPECTION OF OF DOCUMENTS OTHER MATERIAL MATTERS Risks Tax Returns/Unit Prices MANAGER'S STATEMENT KIWISAVER TRUSTEE'S STATEMENT DIRECTORY GLOSSARY APPENDIX A. A. SUMMARY FINANCIAL STATEMENTS APPENDIX B. B. AUDITOR S REPORT - - SUMMARY FINANCIAL STATEMENTS /

3 THE BNZ KIWISAVER SCHEME PROSPECTUS This Prospectus relates to the BNZ KiwiSaver Scheme.* A copy of this Prospectus has been delivered to the Registrar of Financial Service Providers for registration under section 42 of the Securities Act The specified date of this Prospectus is 17 September 2015, which is the date it was delivered in registrable form to the Registrar of Financial Service Providers for registration. This Prospectus has been prepared in compliance with Schedule 5A to the Securities Regulations. For the purposes of clause 6(3) of Schedule 4 to the Financial Markets Conduct Act 2013, we have elected for the Securities Act 1978 to apply to the offer of interests in BNZ KiwiSaver. This election can continue to apply up until 1 December 2016, but we may elect to apply the Financial Markets Conduct Act 2013 to the offer of interests in BNZ KiwiSaver prior to that date by notifying the Financial Markets Authority and the Registrar of Financial Service Providers. General In this Prospectus we, our, us, Manager and Issuer means BNZ Investment Services Limited. You, your, I and member means the person who signs up or is allocated to BNZ KiwiSaver. All terms defined in the Trust Deed which are not separately defined in this Prospectus shall have the same meanings where used in this Prospectus, unless the context otherwise requires. Units not deposits or other liabilities and not guaranteed Investments made in BNZ KiwiSaver do not represent deposits or other liabilities of Bank of New Zealand ( BNZ ) or any other member of the National Australia Bank Limited group, and are subject to investment risk, including the possible loss of income and principal invested. None of BNZ, or any other member of the National Australia Bank Limited group, the Trustee, any director of any of them, the Crown or any other person guarantees (either fully or in part) the performance or returns of BNZ KiwiSaver or the repayment of capital. National Australia Bank Limited, the ultimate parent of BNZ, is not a registered bank in New Zealand, but it is a licensed bank in Australia and is therefore subject to the supervision of the Australian Prudential Regulation Authority. There is no Crown guarantee in respect of any KiwiSaver scheme or investment product of a KiwiSaver scheme. * The term BNZ KiwiSaver may be used in this Prospectus as an abbreviation for the BNZ KiwiSaver Scheme and readers should view those terms interchangeably /

4 Key Information KiwiSaver General Overview Page What is KiwiSaver? Who can join? Why have I been automatically enrolled? How much do I have to contribute? What are the benefits? KiwiSaver is a voluntary savings initiative set up by the Government to encourage New Zealanders to save for their retirement. KiwiSaver schemes are established under a framework set out in legislation. The Government and your employer may also contribute to your KiwiSaver account. You don t have to be employed to join a KiwiSaver scheme, but you do have to be: a New Zealand citizen, or entitled to live in New Zealand permanently; living or normally living in New Zealand unless you are a state sector employee serving outside New Zealand; and under the age of eligibility for New Zealand Superannuation (currently age 65) when you first become a KiwiSaver member. If you are joining the BNZ KiwiSaver Scheme by transferring from another KiwiSaver scheme, you are able to join the BNZ KiwiSaver Scheme even if you are over the qualifying age for New Zealand Superannuation. When you start a new job with a new employer, if you're not already a member of a KiwiSaver scheme and are eligible, your employer will automatically enrol you in KiwiSaver. If this happens, Inland Revenue will provisionally allocate you to your employer's chosen KiwiSaver scheme (if they have one) or otherwise to a default KiwiSaver scheme. You may have been allocated to the BNZ KiwiSaver Scheme by Inland Revenue for either of these reasons. You will still have the option to choose a KiwiSaver scheme. You can opt out of KiwiSaver between the end of weeks two and eight of your new employment if you are automatically enrolled. If you're employed, you need to contribute either 3%, 4% or 8% of your before-tax pay to your KiwiSaver account. Your contributions will be deducted from your takehome pay. If you don t choose a contribution rate, your employer will deduct contributions at the minimum contribution rate of 3%. You can change your contribution rate, as well as make regular or lump sum contributions at any time. You can take a contributions holiday at certain times. If you're self-employed or not working, the minimum amount that you must contribute is set by your KiwiSaver scheme provider. BNZ KiwiSaver has no minimum amount that you have to contribute, however we may close your KiwiSaver account where it has a nil balance, provided we give you notice. You can easily set up bill payments or a direct debit authority to make regular or lump sum contributions to your BNZ KiwiSaver Scheme account. While you are over 18 and below your Qualifying Age and if you are contributing to KiwiSaver through your pay, your employer will generally also contribute 3% of your before-tax pay. Your Qualifying Age is the date when you reach the age of eligibility for New Zealand Superannuation (currently age 65) and you have been a KiwiSaver member (and/or a member of a Complying Superannuation Fund) for at least five years. Employer contributions are taxed before they are credited to your KiwiSaver account. If you are eligible, the Government pays into your KiwiSaver account a Member Tax Credit of 50 cents for every dollar you contribute, up to a maximum of $ each year (1 July to 30 June). You need to be over 18 and below your Qualifying Age (and meet the residency requirements) to be eligible for Member Tax Credits. Your employer may not have to make KiwiSaver contributions if they make contributions to another superannuation scheme for you, and certain conditions /

5 When can I withdraw my KiwiSaver savings? apply. Your employer will be able to confirm if they do not have to make KiwiSaver contributions for you. Generally, you won't be able to withdraw your KiwiSaver savings until you reach your Qualifying Age. Once eligible, you can withdraw all or part of your KiwiSaver savings (certain withdrawal restrictions apply). In limited circumstances, you may also be able to withdraw all or part of your KiwiSaver savings early, including for the following reasons: - Buying your first home - Significant financial hardship - Serious illness - Permanent emigration In some cases, you can t withdraw your full account balance (see page 37 for details). If you permanently emigrate to Australia you cannot withdraw your KiwiSaver savings, unless you otherwise qualify for a withdrawal, for example due to serious illness. However, you can transfer your KiwiSaver savings to certain Australian complying superannuation schemes (see page 36 for details). If you die while you are a KiwiSaver member, your KiwiSaver savings will generally be paid to executors or administrators of your estate. 7, BNZ KiwiSaver Scheme Overview What is the BNZ KiwiSaver Scheme? Who provides the BNZ KiwiSaver Scheme? Where will my money be invested? The BNZ KiwiSaver Scheme is a registered KiwiSaver scheme under the KiwiSaver Act. The BNZ KiwiSaver Scheme is also a Government-appointed default KiwiSaver scheme. Issuer and Manager: BNZ Investment Services Limited Promoters: BNZ and its directors Trustee: The New Zealand Guardian Trust Company Limited Investment Adviser: Russell Investment Group Limited Administration Managers: BNZ and MMC Limited Registrar: Trustees Executors Limited The BNZ KiwiSaver Scheme has 6 funds for you to choose from: - Cash Fund: 100% income assets - First Home Buyer Fund: 85% income assets, 15% growth assets - Conservative Fund: 80% income assets, 20% growth assets (default fund) - Moderate Fund: 65% income assets, 35% growth assets - Balanced Fund: 50% income assets, 50% growth assets - Growth Fund: 30% income assets, 70% growth assets If you have been allocated to the BNZ KiwiSaver Scheme or did not choose a fund, then your contributions will be invested in the Conservative Fund until you tell us otherwise. Each fund has a different target mix of assets ( asset allocation ) that it invests in such as cash and fixed income investments (income assets) and shares (growth assets). You can choose to invest in just one fund, or spread your investment among several funds. We divide the value of each fund into equal parcels, called Units. The contributions you make, and other amounts paid to the BNZ KiwiSaver Scheme on your behalf, buy Units in the fund(s) you have selected. Each Unit has a price that reflects the value of the relevant fund's assets and liabilities (which are regularly revalued) and /

6 What are the risks and returns? What are the fees? Can I make additional regular or lump sum contributions? The key factor that determines returns is the investment performance of the fund(s) you invest in. Investment performance is influenced by the asset allocation of your selected fund(s), the performance of any investment manager and underlying investment managers, the fund s investments and the investment markets generally. Other key factors include the level of contributions made, the length of time you have been a member of the BNZ KiwiSaver Scheme, whether you have made any early withdrawals and the tax, fees and expenses charged. All investments involve an element of risk. Risk is the likelihood of losing money, or getting a lower investment return than you expect. In general terms, the more a fund has invested in growth assets, the greater the fluctuations in returns and long term growth potential. There are two types of fees: a member fee of $1.95 per month (or part month), paid directly from your BNZ KiwiSaver Scheme account. a management fee of up to 1.1% per annum that varies depending on the fund(s) that you invest in. This fee is paid from the fund(s) and is reflected in that fund's Unit Price. Certain expenses are paid by the funds. We and the Trustee are entitled to be reimbursed from the funds for all expenses, losses, costs or liabilities (and the costs of defending claims) incurred in managing or supervising BNZ KiwiSaver. However, reimbursements cannot be made if the loss arises out of wilful default, wilful breach of trust or breach of the standard of care or other duties imposed by law. Yes. It's easy to set up bill payments, or a direct debit authority, to make regular or lump sum contributions to your BNZ KiwiSaver Scheme account Can I change the BNZ KiwiSaver Scheme funds in which I invest? Yes, you can change funds within the BNZ KiwiSaver Scheme at any time, for free. 47 Can I change to another KiwiSaver scheme or provider? Are my KiwiSaver savings guaranteed? What information will I get? What if I belong to another KiwiSaver scheme? Who can I contact for further information? You can also change to a different KiwiSaver scheme or provider by contacting them directly. No, KiwiSaver savings are not guaranteed by any person or organisation, including the Government. If you use BNZ internet banking, you'll be able to check your BNZ KiwiSaver Scheme account balance at any time. You'll also receive an annual statement of your account, a tax certificate, and a copy of the BNZ KiwiSaver Scheme Annual Report (including summary financial statements). You can still join the BNZ KiwiSaver Scheme, but you can belong to only one KiwiSaver scheme at a time. When you join the BNZ KiwiSaver Scheme we will arrange the transfer of your KiwiSaver account balance from your previous KiwiSaver scheme provider. Call us on , us at kiwisaver.support.team@bnz.co.nz or visit your local BNZ store and and the investment statement for the BNZ KiwiSaver Scheme /

7 In this section, we briefly describe the BNZ KiwiSaver Scheme and what funds you can invest in. 1. DESCRIPTION OF SCHEME 1.1 Name of the scheme The name of the KiwiSaver scheme is the BNZ KiwiSaver Scheme. 1.2 Year and place of establishment of the scheme BNZ KiwiSaver was established by a Trust Deed dated 8 January 2013 in Auckland and was registered under the KiwiSaver Act 2006 (the KiwiSaver Act ) on 16 January Brief description of the BNZ KiwiSaver Scheme and the interests being offered BNZ KiwiSaver is designed to help you save for your retirement. The amount you receive when a benefit is payable is determined by the contributions made to BNZ KiwiSaver, the investment returns of the fund(s) you invest in, whether you ve made any early withdrawals, and the fees, tax, and expenses deducted from your investment. In most cases you won t be able to withdraw your KiwiSaver savings until you reach your Qualifying Age. In limited circumstances you may be able to withdraw all or part of your KiwiSaver savings sooner (see the Early withdrawals section beginning on page 33). As at the date of this Prospectus BNZ KiwiSaver is also a Government-appointed default KiwiSaver scheme. Enrolment In most cases, if you are: a New Zealand citizen or entitled to New Zealand permanent residency; living or normally living in New Zealand; and under the qualifying age for New Zealand Superannuation (currently age 65) and joining a KiwiSaver scheme for the first time, you will be able to join BNZ KiwiSaver. You can become a member of BNZ KiwiSaver if you: apply to us directly; opt into KiwiSaver through your employer (and are allocated to BNZ KiwiSaver because it is your employer s chosen KiwiSaver scheme or a default KiwiSaver scheme); or are automatically enrolled in KiwiSaver when you start a new job with a new employer (and are allocated to BNZ KiwiSaver because it is your employer s chosen KiwiSaver scheme or a default KiwiSaver scheme) /

8 If you are joining BNZ KiwiSaver by transferring from another KiwiSaver scheme, you are able to join BNZ KiwiSaver even if you are over the qualifying age for New Zealand Superannuation. You may be eligible to enrol in BNZ KiwiSaver if you re an employee of the State services (within the meaning of the State Sector Act 1988) serving outside New Zealand, employed on New Zealand terms and conditions and in a jurisdiction where offers of membership in BNZ KiwiSaver are lawful. You can be a member of only one KiwiSaver scheme at a time. If you choose to join BNZ KiwiSaver, you won t be able to opt out of KiwiSaver (the opt-out facility applies only to those automatically enrolled in a KiwiSaver scheme). Automatic enrolment and opting out You may have been provisionally allocated to BNZ KiwiSaver if you have been automatically enrolled in KiwiSaver. If you do not opt out of KiwiSaver or choose another KiwiSaver scheme, then you will become a member of BNZ KiwiSaver and you are deemed to have acknowledged and accepted the terms and conditions set out in section 6 of the application form. You can opt out between the end of weeks two and eight of your new employment. Investment funds BNZ KiwiSaver allows you to invest your contributions into one of the six available funds, or to spread your investment among several funds. The minimum allocation to any one fund is 5% of any contribution you make. Contributions are accepted from members and then collectively invested. The six available investment funds are: - Cash - First Home Buyer - Conservative (default) - Moderate - Balanced - Growth We will automatically invest your contributions in the Conservative Fund until you tell us otherwise if: you have been allocated to BNZ KiwiSaver because it is a default KiwiSaver scheme or your employer's chosen KiwiSaver scheme; or we haven t received your investment instructions; or your investment instructions are unclear. All funds were established on 28 January 2013, except the First Home Buyer Fund which was established on 16 September See pages 40 to 47 for the target asset allocations or benchmarks for each fund and for more detailed descriptions about the funds /

9 How is your investment calculated? Your investment is measured in Units in the fund(s) in which you invest. Your contributions buy Units in the fund(s) you have selected at what is known as a Unit Price. Each Unit represents a proportional interest in that fund s assets. As the investments made by the fund(s) rise or fall in value, so does the value of each individual Unit. This means that the value of your investment will fluctuate (up or down) based on the rise or fall in the value of the investments made by the fund. A Unit does not give you any entitlement to any specific assets owned by BNZ KiwiSaver or allocated to any fund. Unit Prices are generally declared each business day. The Unit Price for a fund is the price that you will pay (or receive) when each contribution is invested (or any withdrawals are made from your investment) in the fund. The Unit Price reflects both the capital growth and losses of the investments in a fund and any income earned less any fees, expenses or other liabilities (excluding any tax) of that fund. Occasionally, if there are large volumes of contributions relative to withdrawals, the Unit Price you pay may be adjusted to pass on some of the costs of investing those contributions, to ensure that members who are not buying Units are not impacted by those costs. See page 64 for details. Transfers from an Australian complying superannuation scheme You can transfer your superannuation savings from an Australian complying superannuation scheme to BNZ KiwiSaver if New Zealand is now your place of permanent residence. Savings transferred to your BNZ KiwiSaver account from an Australian complying superannuation scheme can be withdrawn once you reach the age of 60 and you also satisfy the retirement definition in Australian legislation. This definition requires you either to: have attained age 60 on or before the ending of your employment; or reasonably satisfy the Trustee that you intend never to again become employed on a full time or a part time basis. For more information on how to transfer your Australian complying superannuation scheme savings to BNZ KiwiSaver, please call us on If you transfer your Australian complying superannuation scheme savings to BNZ KiwiSaver, some of the terms and conditions of BNZ KiwiSaver (as described in this Prospectus and the investment statement for BNZ KiwiSaver) will not apply to the savings transferred. For example, Australian complying superannuation scheme savings cannot be withdrawn for a first home purchase. Your Australian complying superannuation scheme provider may charge a fee to transfer the savings. You should also consider any effects of currency conversion (including exchange rate fees) and any differences in the product terms, fees and tax treatment of the two schemes if you are considering transferring your superannuation savings from an Australian complying superannuation scheme. We recommend that you seek personalised tax and investment advice before transferring your Australian savings, including advice as to the risks, benefits and options available to you. Transfers from other New Zealand registered superannuation schemes It may be possible to transfer retirement savings held in other New Zealand registered superannuation schemes to BNZ KiwiSaver. If you transfer your retirement savings to BNZ KiwiSaver, your savings will be governed by the terms and conditions of BNZ KiwiSaver (as described in this Prospectus), and the terms and conditions of your previous scheme will no longer apply /

10 Transfers from non-australian foreign superannuation schemes Transfers to a KiwiSaver scheme from a foreign superannuation scheme (other than an Australian complying superannuation scheme) are treated as withdrawals from the foreign scheme and are potentially subject to New Zealand tax. They may also affect your student loan repayments and any income-tested benefits. You may apply to make a withdrawal from your BNZ KiwiSaver account to pay any New Zealand tax liability or additional student loan repayment obligation that arises as a result of you transferring to BNZ KiwiSaver from a non-australian foreign superannuation scheme. You will need to apply for the withdrawal within two years of the tax liability or student loan repayment obligations being assessed by Inland Revenue and provide certain information to us to support your withdrawal request. You should be aware that in some circumstances the withdrawal may trigger a foreign tax liability. We recommend that you seek personalised tax and investment advice before transferring your savings from a foreign superannuation scheme. Please note that neither us, nor any of the other parties involved in BNZ KiwiSaver, is responsible for any tax consequences arising from any transfer of foreign superannuation savings you make. Transfers including UK pension amounts If you have transferred UK pension money into another KiwiSaver scheme, you may incur UK tax if you transfer to BNZ KiwiSaver or another KiwiSaver scheme. If your KiwiSaver savings include UK pension sourced amounts, we strongly recommend you talk to your independent tax adviser when considering transferring your KiwiSaver savings. BNZ Authorised Financial Advisers For personalised advice about which fund is right for you we recommend that you contact a BNZ Authorised Financial Adviser. A disclosure statement required under the Financial Advisers Act 2008 is available, free of charge, from your BNZ Authorised Financial Adviser or on request by calling /

11 In this section, we describe the various persons involved in providing the BNZ KiwiSaver Scheme to you. 2. MANAGERS AND PROMOTERS 2.1 Manager The Manager of BNZ KiwiSaver is BNZ Investment Services Limited. It is also the Issuer of the membership interests in BNZ KiwiSaver for the purposes of the Securities Act We were incorporated in New Zealand under the Companies Act 1993 on 16 October We are a wholly owned subsidiary of BNZ (incorporated in New Zealand). National Australia Bank Limited, a licensed bank in Australia, is our ultimate parent. National Australia Bank Limited does not guarantee the interests in BNZ KiwiSaver. BNZ KiwiSaver is the only KiwiSaver scheme that we manage. As at the date of this Prospectus, we intend to apply for and obtain a managed investment scheme manager licence under the Financial Markets Conduct Act 2013, prior to the 1 December 2016 due date. A biography for each of our directors follows: Richard Morath (BA, Fellow of the Institute of Actuaries-London and Australia, Associate of the Securities Institute of Australia) Mr Morath is a non-executive director of the Manager. Mr Morath has over 40 years experience in life insurance, funds management, banking and financial planning. Mr Morath was appointed a director of the Manager in 2013 and is the current chairman of the Manager s board. Mr Morath is a non-executive director and chairman of the Advice & Licences Boards and all financial planning companies in the National Australia Bank Limited group in Australia. Mr Morath is also the chairman of National Australia Trustees, a director of JANA Investment Advisors Limited, a director of BNZ Life Insurance Limited, a director of ASX listed Platinum Capital Limited (and chair of that company s audit committee), and a director of ASX listed Wealth Defender Equities. Mr Morath was previously CEO MLC Retail Funds, CEO MLC Corporate Funds, Group Executive Lend Lease Corporation and chairman of Plum (the MLC group vehicle providing member services to the large corporate superannuation market). Shelley Ruha (BCom) Ms Ruha is an executive director of the Manager and Head of BNZ Partners. Ms Ruha became a member of the BNZ Executive Team in November 2011, after 22 years with BNZ. During her time at BNZ, Ms Ruha has amassed significant leadership experience in business banking, institutional banking, products, technology and operations. Ms Ruha was appointed a director of the Manager in 2012 and is chairperson of BNZ s Investment Review Committee. Christopher Reid (LLB) Mr Reid is an executive director of the Manager and the Chief General Counsel for BNZ. Mr Reid is a qualified lawyer with over 25 years' legal experience and leads BNZ's legal, regulatory and secretariat teams. Mr Reid was appointed a director of the Manager in /

12 Lee Hatton (BBS) Ms Hatton is currently Chief Executive (appointed April 2015) of UBank, an on-line banking division of National Australia Bank Limited (NAB) and was previously, General Manager Group Regulatory Strategy & Affairs at NAB. With over 15 years of banking experience in NZ, UK, USA and Australia, Ms Hatton has held a number of management and leadership roles across the financial services industry, having spent time in strategy, risk, retail and corporate banking. Ms Hatton was appointed a director of the Manager in Jacqueline Farman (BBS; Chartered Accountant) Ms Farman is Financial Controller for BNZ. Prior to that, Ms Farman was Head of BNZ Investment Services Limited. In that role, Ms Farman and her team focused on ensuring compliance with regulatory requirements for BNZ s managed funds, together with the management of third-party service providers for BNZ s managed funds. Ms Farman has over 20 years experience in the financial services industry, focused primarily on finance and compliance-related roles. Ms Farman was appointed a director of the Manager in January Directors are as at the date of this Prospectus and may change from time to time without prior notice to members. The current directors can be found on the Companies Office website at Investment Manager and Administration Managers As at the date of this Prospectus, there is no appointed third party investment manager for BNZ KiwiSaver. However, during the life of this Prospectus we are considering appointing Nikko Asset Management New Zealand Limited ( Nikko ) to manage BNZ KiwiSaver s investment in New Zealand cash. If the appointment is made or revoked, it will be published on and you can call us on for any updates on the appointment. We have appointed Russell Investment Group Limited ( Russell Investments ) as investment adviser, to provide strategic investment advice to us in relation to the investment management of BNZ KiwiSaver. This may include advice about the anticipated mix of investments for each of the funds, rebalancing the funds to that anticipated mix, how each investment class is invested and foreign currency hedging. The administration managers of BNZ KiwiSaver are MMC Limited ( MMC ) and BNZ. MMC provides certain administration services including accounting services for BNZ KiwiSaver. BNZ provides customer management and certain administrative functions in relation to BNZ KiwiSaver. 2.3 Promoters BNZ and its directors are each promoters of BNZ KiwiSaver (each a Promoter and together the Promoters ). The names and addresses of us and our directors, and the names of the directors of BNZ, are set out in the directory at page 68 of this Prospectus /

13 3. REGISTRAR, AUDITORS, ADVISERS AND EXPERTS 3.1 Registrar Trustees Executors Limited (the Registrar ) provides registry administration services for, and is the Registrar of, BNZ KiwiSaver. 3.2 Auditor We have engaged Ernst & Young as auditor of BNZ KiwiSaver (the Auditor ). The Auditor is a registered audit firm and the Auditor's audit partners are registered as licensed auditors under the Auditor Regulation Act The Auditor carries out other assignments for us and our related entities. These matters have not impaired the Auditor's independence as our auditor or the auditor of BNZ KiwiSaver. 3.3 Custodian The assets of BNZ KiwiSaver are held in the name of BNZ Investment Services Nominees Limited (the Custodian ), which is a subsidiary of the Trustee. 3.4 Other professional advisers The solicitors involved in the preparation of this Prospectus were Chapman Tripp. 3.5 Experts There are no experts named in this Prospectus. 4. INDEPENDENCE OF KIWISAVER TRUSTEE AND CUSTODIAN As at the date of this Prospectus, The New Zealand Guardian Trust Company Limited is the trustee of BNZ KiwiSaver (the Trustee ). The Trustee and the Custodian are independent of us, MMC, BNZ, the Promoters, Russell Investments, and Nikko, if appointed as an investment manager. 5. KIWISAVER TRUSTEE Trustee The New Zealand Guardian Trust Company Limited is the trustee of BNZ KiwiSaver. Its address and the names and addresses of its directors are set out in the directory on page 68 of this Prospectus. The Trustee was incorporated in New Zealand on 7 September 1982 under the Companies Act 1955 and was registered under the Companies Act 1993 on 23 April Its origins date back to The New Zealand Guardian Trust Company Limited is a wholly owned subsidiary of Complectus Limited. The Trustee s ultimate holding company is Bath Street Capital Limited (previously known as Perpetual Guardian Holding Company Limited), a company incorporated in New Zealand. As at the date of this Prospectus, the Trustee holds a licence to act as trustee for a range of financial products, including BNZ KiwiSaver, under the Financial Markets Supervisors Act 2011 (the FMS Act ) for a term expiring on 16 March /

14 In granting the licence, the Financial Markets Authority has imposed a condition that the Trustee must certify in its six-monthly reports to the Financial Markets Authority under section 25 of the FMS Act that: it has sufficient financial resources and independence to support and develop its trustee and statutory supervisor business; and it holds adequate professional indemnity insurance for its trustee and statutory supervisor business. If the Trustee is held personally liable to any person for any action taken or omitted, or any debt, liability (including any tax liability), or obligation incurred by or on behalf of BNZ KiwiSaver or any member, the Trustee is entitled to be fully indemnified out of the assets of BNZ KiwiSaver (or where the obligation relates solely to a particular fund or funds, out of the assets of those funds). The Trustee's right to indemnification is subject to the requirements of the Trust Deed to treat each fund as a separate trust, as set out under the heading Investment funds on pages 18 to 19. Under those provisions, any indemnity for a liability for tax attributable to an insolvent fund would be apportioned between the other funds on such fair and equitable basis as we determine. For more information, please refer to Part 6 of this Prospectus. This indemnity applies despite provisions in the Trust Deed which confirm that the Trustee acts on the members behalf (and not on its own account) in incurring any liabilities or taking any action under the Trust Deed, and that it will have no personal liability for the satisfaction of any obligation or claim arising out of or in connection with any contract or other obligation of BNZ KiwiSaver. However, the Trustee s right to indemnification is subject to section 116J of the KiwiSaver Act which voids any provision that would have the effect of exempting or indemnifying the Trustee from liability for breach of trust in the event that it fails to exercise the care, diligence and skill that a prudent trustee would exercise in acting as the trustee of a KiwiSaver scheme. In addition, the Trustee is personally liable for any loss arising out of its wilful default or wilful breach of trust. None of the Trustee, the Trustee s nominee companies, nor any of their directors, officers or agents, guarantee the repayment of, or the payment of any earnings on, the interests in BNZ KiwiSaver /

15 6. DESCRIPTION OF SCHEME AND ITS DEVELOPMENT 6.1 Date of Trust Deed BNZ KiwiSaver is governed by a trust deed dated 8 January 2013 (and amended on 1 July 2014), and any Establishment Deed entered into pursuant to that deed (being, at the date of this Prospectus, Establishment Deeds for the Cash Fund, Conservative Fund, Moderate Fund, Balanced Fund and Growth Fund between us and the Trustee dated 28 January 2013 and the Establishment Deed for the First Home Buyer Fund dated 16 September 2015), each as amended from time to time. In this Prospectus, Trust Deed means the trust deed, the Establishment Deeds and, in relation to a Participating Employer, the relevant Participation Agreement. The terms and conditions of the Trust Deed are for the benefit of, and are binding on, each member and all persons claiming through that member. 6.2 Principal terms of the Trust Deed The information set out below only includes a summary of the main provisions of the Trust Deed, which are not addressed elsewhere in this Prospectus. If more detail is required, you should review the Trust Deed. You can request a copy of any of these documents from us or the Trustee. Copies are also available from the Companies Office website at Structure BNZ KiwiSaver is constituted by the Trust Deed. The principal purpose of BNZ KiwiSaver is to provide retirement benefits to natural persons in accordance with the KiwiSaver Act. The Trustee holds all contributions and other assets of BNZ KiwiSaver for members on the trusts established in accordance with the terms of the Trust Deed. The Trustee is also responsible for supervising our performance of our functions (set out below). We are responsible for (among other things): offering interests in BNZ KiwiSaver for subscription; issuing interests in BNZ KiwiSaver; managing the investments and property of BNZ KiwiSaver; and administering BNZ KiwiSaver, including maintaining the register. We have delegated some of our administrative responsibilities to MMC, BNZ and Trustees Executors Limited /

16 Membership Admission You can become a member of BNZ KiwiSaver: in accordance with sections 47 and 48 of the KiwiSaver Act (where us and your employer have agreed that you will have access to BNZ KiwiSaver); subject to the Relevant Requirements, by completing an Application Form at the back of the investment statement for BNZ KiwiSaver, online through BNZ internet banking (if you are a BNZ customer), at or at a BNZ store and contracting directly with us to become a member of BNZ KiwiSaver in accordance with section 45 (as a natural person who has chosen to join BNZ KiwiSaver) or section 55 (as a natural person who has chosen to transfer from another KiwiSaver scheme or a Complying Superannuation Fund to BNZ KiwiSaver) of the KiwiSaver Act; while BNZ KiwiSaver is a default KiwiSaver scheme, in accordance with section 52 of the KiwiSaver Act (as a Default Member); or by way of a transfer into BNZ KiwiSaver effected under subpart 3 of Part 2 of the KiwiSaver Act or otherwise in accordance with the KiwiSaver Act. Subject to the Relevant Requirements, we may in our absolute discretion accept or refuse to admit any natural person as a member. We may accept or refuse an application for admission by an employer as a Participating Employer in our absolute discretion. To become a Participating Employer an employer must enter into a Participation Agreement. Cessation of membership You will cease to be a member on the first to occur of the following events: if you die and your personal representative receives your Member s Accumulation from BNZ KiwiSaver in accordance with the KiwiSaver Scheme Rules; you transfer from BNZ KiwiSaver to another KiwiSaver scheme in accordance with the requirements of subpart 3 of Part 2 of the KiwiSaver Act, or to any other superannuation scheme, in accordance with the requirements of the KiwiSaver Act (and you have no further entitlement under BNZ KiwiSaver); and where you have a nil balance, and you receive notice from us under rule 4(5)(b) of the KiwiSaver Scheme Rules that your membership is terminated or you have received your full benefit from BNZ KiwiSaver and have no further entitlement under BNZ KiwiSaver. Accounts We will establish and maintain for each member a Member Account, denominated in Units issued in respect of member and employer contributions, and any Member Tax Credit. Any Australian complying superannuation scheme transfers and transfers from other KiwiSaver schemes will also be recorded in the Member Account /

17 We may also establish and maintain for certain members: an Employer Account if you join through a Participating Employer, denominated in Units issued in respect of employer contributions; and an Overseas Transfer Account, denominated in Units issued in respect of any amounts transferred to BNZ KiwiSaver from an overseas superannuation or pension scheme. Any Australian complying superannuation scheme transfers will be placed into the Member Account and not an Overseas Transfer Account. As at the date of this Prospectus, we have no intention of establishing an Employer Account or an Overseas Transfer Account in respect of any member. Please note that accounts established under BNZ KiwiSaver are not bank accounts. We may also establish and maintain, for a Participating Employer whose contributions are subject to a vesting period, an Employer Reserve Account. This will principally comprise Units issued in respect of amounts forfeited from Employer Accounts after members have left that Participating Employer's employment before completing the vesting period. We may establish other accounts, establish sub-accounts within an account or amalgamate two or more accounts, in each case on such terms and conditions as we consider appropriate. We may transfer Units between accounts on such terms and conditions as we consider appropriate, subject to your consent if required by the KiwiSaver Act. Participating Employer contributions Subject to any minimum contribution amounts set by us, a Participating Employer: must contribute to BNZ KiwiSaver the amounts set out in the Participation Agreement and, subject to the Relevant Requirements, we must accept such contributions; and may make additional contributions to BNZ KiwiSaver in respect of any member at any time. Accepting contributions Subject to the requirements of the KiwiSaver Act and any minimum contribution amounts (see below), we must accept into BNZ KiwiSaver: all amounts paid to BNZ KiwiSaver via Inland Revenue by or in respect of a member under the KiwiSaver Act (including any contributions made by an employer in respect of that member), unless we have reasonable cause to believe that the amounts have not been correctly deducted or remitted to BNZ KiwiSaver or that we have not been provided with the information we require in relation to such amounts by Inland Revenue; any amounts contributed to BNZ KiwiSaver by a Participating Employer as set out in the Participation Agreement (see Participating Employers on page 22); the minimum member contribution required by the KiwiSaver Scheme Rules; and any Member Tax Credits paid to BNZ KiwiSaver in respect of a member /

18 Subject to the Relevant Requirements, if you are entitled to a benefit or to otherwise transfer an amount from a transferor scheme, we will, on such terms and conditions as we determine, accept a transfer from that transferor scheme of an amount notified to us by the trustee(s) or manager or equivalent of that transferor scheme. We may, subject to the Relevant Requirements, accept contributions other than in cash. We may accept other contributions payable to BNZ KiwiSaver by or in respect of a member, and may impose such terms and conditions for such acceptance. We must cancel Units and repay contributions which we determine were paid by mistake (unless prevented by the Relevant Requirements or agreed otherwise) or which we should have refused to accept on the basis that acceptance would contravene the Relevant Requirements. Minimum contribution amounts Subject to the Relevant Requirements, the amount of any contribution to BNZ KiwiSaver must not be less than any minimum amount determined by us. We may waive any minimum contribution amount either generally or in respect of a particular member or members provided that, for the avoidance of doubt, no such waiver may operate in a manner that is inconsistent with section 66 of the KiwiSaver Act or any other Relevant Requirements. Investment funds From time to time we may agree with the Trustee to establish separate funds within BNZ KiwiSaver. The terms and conditions for each fund will be set out in the Trust Deed or in an Establishment Deed for the relevant fund, and must include written investment guidelines. We can only change the written investment guidelines if we give the Trustee 14 days prior written notice of our intention to do so. Each fund will be treated by us and the Trustee as a separate and distinct trust with its separate property and liabilities governed by the Trust Deed. In summary: all assets held for a fund will not be available to meet the liabilities of any other fund; all liabilities incurred in relation to a fund will be met from the assets held for that fund; except to the extent necessary to meet the liabilities incurred in relation to a fund, all investments made with assets of a fund will be held by or on behalf of the Trustee exclusively for that fund and for the exclusive benefit of members and Participating Employers with interests in that fund (provided that we may transfer value between funds to accommodate BNZ KiwiSaver being a single taxpayer); we must keep separate records and accounts in respect of each fund, and not permit the assets or liabilities of any fund to become intermingled with those of any other fund, except as outlined above; and /

19 the provisions of the Trust Deed relating to the indemnities in favour of us and the Trustee, the fees payable to us and the Trustee and the other costs, expenses, fees, premiums and taxes payable in relation to the management and administration of BNZ KiwiSaver will be construed such that: (i) (ii) (iii) any amount payable from the assets of BNZ KiwiSaver will be payable from the assets held for the fund or funds to which the matter giving rise to the amount relates (except as set out above); where any amount payable from the assets of BNZ KiwiSaver relates to more than one fund, that amount shall be apportioned between those funds on such fair and equitable basis as we determine; and if at any time, and to the extent that, there are insufficient assets in a fund to indemnify or reimburse us or the Trustee in respect of a liability for tax attributable to that fund, the remaining amount payable will be apportioned between the other funds on such fair and equitable basis as we determine. You are entitled to choose the fund (or funds) in which your savings will be invested, subject to complying with any rules prescribed by us regarding the maximum number of funds that may be chosen, minimum investment amounts, switching between funds, communication of choices, choice of default fund (currently the Conservative Fund for all members) and any other matters relating to the choice of funds by members. The establishment of a fund by us, the choice of a fund by an employer and the choice of a fund or funds by a member are directions given with respect to the investment of trust funds for the purposes of section 13G of the Trustee Act Our investment obligations under the Establishment Deed and the Trust Deed constitute a contrary intention for the purposes of section 2(5) and section 2(5A) of the Trustee Act However, no direction that you give us will exempt us from our responsibilities under Rule 1E of the KiwiSaver Scheme Rules. We may, after giving the Trustee 14 days prior notice, terminate, close, wind up or alter any fund, or amalgamate two or more funds, in each case on terms and conditions as decided by us. When the funds are wound up we will notify each affected member, specifying the fund to which you will be deemed to have elected to transfer the relevant amount if you do not choose a replacement fund within the period prescribed in the notice. While BNZ KiwiSaver is a default KiwiSaver scheme, the Conservative Fund cannot be wound up or closed unless a similar fund is offered. Unitisation We will operate BNZ KiwiSaver, and each fund, on a unitised basis, with the beneficial interests in BNZ KiwiSaver and each fund divided into Units. Units in a fund will: be of one class and will confer identical rights and interests; for the purpose of the definition of Investor Class, confer on each member an equivalent interest in all of the investments comprised in the relevant fund corresponding to the member's Investor Interest (or the relevant portion of the member's Investor Interest), but will not confer any interest, /

20 to the exclusion of any other member, in any particular investment comprised in the fund (with the result that no member will be entitled to require the transfer of any investment to the member); not confer any right or interest in the assets of any other fund; and for the purposes of section EX 53 of the Income Tax Act, confer on a member the right to be treated as if there were assigned to that member an interest in a proportion of the net returns from the investments comprised in the fund corresponding to the member's Investor Interest (or the relevant portion of the member s Investor Interest). Each Unit Price will be determined on each valuation day by dividing the Net Asset Value of the relevant fund by the number of Units then on issue in that fund. The valuation day is the day on which each fund is valued in accordance with the Trust Deed. Generally, this is each business day. The assets used to determine the Unit Price on a valuation day will not include amounts received for which no Units have been issued, and will include amounts debited, transferred or withdrawn from any account for which Units have not been cancelled, at the time the determination is made. We will generally issue Units in each relevant fund on the next valuation day after the receipt, payment or transfer of any amount credited to your BNZ KiwiSaver account, subject to delayed unitisation. The Units will be issued based upon the amount received, paid, payable or transferred (net of any amount that we consider appropriate to deduct for fees, expenses or other liabilities, excluding any tax) at the relevant Unit Price or Unit Prices applying on that valuation day. Without limiting the above, but subject to the KiwiSaver Act, we may delay converting into Units any contributions accepted into BNZ KiwiSaver in respect of any member or group of members until we are reasonably satisfied that those contributions have not been paid by mistake. Without limiting the above or any other provision of the Trust Deed (but subject to the KiwiSaver Act) we may, after consulting with the Trustee, determine at any time or times that from a specified date no further Units will be issued pursuant to the Trust Deed (or, if applicable, in relation to a specified fund or funds) either: (a) (b) for a specified period; or until BNZ KiwiSaver, or the relevant fund(s), is or are wound up or terminated, and in that case we will not, after the date specified and for the period contemplated by paragraph (a) or paragraph (b) as applicable, issue any further Units under the Trust Deed or in relation to such fund(s). In respect of Units debited from any account either: pursuant to clause 4 of the Trust Deed; for any tax liability paid or payable by BNZ KiwiSaver (under the PIE regime) as determined by us to be attributable to you; or for any other amounts required to be paid by BNZ KiwiSaver to Inland Revenue under the Income Tax Act as a result of a transfer or withdrawal by you, /

21 we will cancel the number of Units determined by dividing the amount debited by the relevant Unit Price or Unit Prices applying on the next valuation day after we determine that the debit shall be made (provided that, for Units debited on account of tax payable, we may use the valuation day on which we finally determine the amount of tax payable). Subject to the requirements of the KiwiSaver Act, if we decide that to allow a withdrawal or transfer from BNZ KiwiSaver or a switch between funds would not be in the best interests of the members, we may delay paying withdrawals or processing transfers from BNZ KiwiSaver, or allowing switches between funds. We cannot have a delay for more than 10 business days without the prior written approval of the Trustee. Normally such delays may occur, for example, following the end of an income tax period, while we finalise our tax calculations for BNZ KiwiSaver. Valuation We will calculate, at least once every five business days, the amount expressed in New Zealand currency that fairly represents the following in respect of BNZ KiwiSaver and each fund: the Gross Asset Value by adding the market value of the assets attributable to BNZ KiwiSaver or the fund, as applicable; and the Net Asset Value, by deducting the liabilities (excluding, where BNZ KiwiSaver is a PIE, and we consider it appropriate to do so, any liability for tax attributable to BNZ KiwiSaver or the fund, as applicable) from the Gross Asset Value of BNZ KiwiSaver or the fund, as applicable. For the purpose of determining the Net Asset Value and the Gross Asset Value, we will determine the market value of each asset, and the amount of each liability, on a basis that we consider to be fair and equitable in accordance with generally accepted accounting practice as defined in the Financial Reporting Act. These determinations of Net Asset Value and Gross Asset Value will remain in force from the time they take effect until the time determined by us on the next business day that a subsequent determination is made. The Net Asset Value and Gross Asset Value will be determined on a consistently applied basis. However we are entitled to alter the basis of determination in consultation with the Trustee. Benefits You will only be entitled to receive a benefit where and to the extent that the KiwiSaver Act allows. Notwithstanding anything to the contrary in the Trust Deed, benefits will be payable from BNZ KiwiSaver in accordance with the KiwiSaver Scheme Rules. Calculation of Member s Accumulation Subject to our powers while BNZ KiwiSaver is a PIE, when we are required under the KiwiSaver Scheme Rules to calculate an amount representing a Member s Accumulation, we will calculate that amount by: multiplying the Units attributable to the accounts maintained for you by the relevant Unit Price or Unit Prices applying for the purpose of cancelling Units on the next valuation day after we make a final determination that a benefit should be paid; /