Eligible Service Superannuation Schemes

Date Made

Date signed: 2014-03-13

Sectors

Investment scheme (IS)

Enacting statement

In accordance with section 157(6)(b) of the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 ("the Act"), the Minister of Justice hereby gives notice that she has granted the following exemptions from the AML/CFT Act:

Ministerial Exemption: Eligible Service Superannuation Schemes

Commencement date

This exemption comes into force on 2014-03-13

End date

This exemption will expire on 2018-06-30

Exemption

In my capacity as the Minister of Justice and pursuant to section 157 of the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (the Act) I partially exempt the Trustees of the Board of Administration of the Methodist Church of New Zealand, the Presbyterian Church Property Trustees of the Presbyterian Church of Aotearoa New Zealand, and the New Zealand Anglican Church Pension Board (each a Board and together, the Boards), from the provisions of Part 2 of the Act in relation to services provided in respect of the following funds:

1. 1. The Supernumerary Fund of the Methodist Church of New Zealand (Methodist Fund);
   2. the Beneficiary Fund of the Presbyterian Church of Aotearoa New Zealand (Presbyterian Fund); and
   3. the New Zealand Anglican Church Pension Fund (Anglican Fund), (together referred to as the Funds).

The Trust Deed may permit:

1. 1. voluntary contributions made other than through payroll to those sections of the Funds which are subject to restrictions set out in the complying superannuation fund rules provided there is a cap on the amount of any non-payroll voluntary contributions made in a KiwiSaver year. The cap should be set at the amount (after taking into account any contribution through payroll) required to enable a member to maximise, in respect of that year, those government contributions set out in section MK 4 of the Income Tax Act 2007; and
   2. voluntary contributions made other than through payroll for the purpose of purchasing additional pensionable service, provided that the Funds undertake enhanced customer due diligence on every member who applies to purchase service by making such contributions.

The Trust Deed for each of the Funds may permit contributions to be made other than through payroll by a member to the relevant Fund during a permitted period of unpaid leave of absence (Regular Leave of Absence Contributions) where:

1. 1. the employer or the Fund's administrator collects those contributions; and
   2. the contributions do not exceed (as to either amount or frequency) the contributions that were being paid by the relevant member in accordance with the trust deed for the Fund immediately prior to the member commencing leave of absence.

Where any Regular Leave of Absence Contributions are received from international sources during the permitted period of unpaid leave of absence, the following sections of the Act apply to such contributions:

1. 1. Sections 10 to 18 of the Act (and for the purposes of section 14(d) of the Act the receipt of a contribution from an international source is specified as a circumstance in which standard customer due diligence must be conducted);
   2. sections 40 to 48 of the Act;
   3. where the transaction is relevant to a suspicious transaction report, sections 49(1) and 2(a) to (f) of the Act; and
   4. sections 92 to 100 of the Act.

Where any withdrawals are made by a member in addition to that member making Regular Leave of Absence Contributions during the permitted period of unpaid leave of absence the following sections of the Act apply to such withdrawals and contributions:

1. 1. Sections 10 to 18 of the Act (and for the purposes of section 14(d) of the Act the first such withdrawal is specified as a circumstance in which standard customer due diligence must be conducted);
   2. sections 40 to 48 of the Act;
   3. where the transaction is relevant to a suspicious transaction report, sections 49(1) and (2)(a) to (f) of the Act; and
   4. sections 92 to 100 of the Act.

Conditions

This exemption is subject to the following conditions:

1. 1. Subject to paragraphs 3 and 4 below, the Boards are required to remove any mechanisms contained in the Trust Deed for each of the Funds that enable members to contribute to the Funds voluntarily other than through payroll.
   2. The Funds must remain registered superannuation schemes as defined under the Superannuation Schemes Act 1989 or registered under the Financial Markets Conduct Act 2013 as applicable.
   3. With the exception of Australian superannuation transfers to the Funds (if applicable) and, in the case of the Anglican Fund, contributions from the Diocese of Polynesia which are made through payroll, customer due diligence in accordance with sections 10 to 36 of the Act and suspicious transaction reports in accordance with sections 40 to 48 of the Act and, where the transaction is relevant to a suspicious transaction report, transaction records in accordance with sections 49(1) and (2)(a) to (f) of the Act are required on all contributions and transfers to the Funds from international sources.

Statement of reasons

The exemption has been granted for the following reasons:

1. 1. The Boards' only duties as reporting entities under the Act are in respect of the Funds;
   2. the Funds pose a very low risk of money laundering or terrorism financing;
   3. any risks posed by voluntary contributions outside of payroll have been addressed by the conditions;
   4. due to the very low money laundering and terrorism financing risks raised by the Funds and the significant compliance costs that would arise from not granting this exemption, I consider that any benefits of requiring compliance with the Act are not justified by the associated costs; and
   5. this exemption is consistent with (and has no effect on the purpose or intent of) the Act, the Financial Transactions Reporting Act 1996 and New Zealand's international obligations as a member of the Financial Action Taskforce and the Asia Pacific Group on Money Laundering.

Contact

Any person wishing to provide comment on this notice should contact the AML/CFT Team at the Ministry of Justice by emailing amlcft.exemptions@justice.govt.nz.