Claim on UEB super surplus

Press, 28 December 1988, Page 24

Claim on UEB super surplus

PA Auckland New Zealand Equities says it has no doubt it is entitled to a $22 million surplus left after the termination and distribution of the UEB Industries superannuation plan. That was made clear at the annual meeting of New Zealand Equities by the company chairman, Mr Avon Carpenter. He said New Zealand Equities also had no doubt that members of the superannuation fund were being treated fairly.

Mr Carpenter faced prolonged questioning from shareholders about termination of the scheme.

Answers to the questions were covered largely in a statement issued after the meetingto the news media. Mr Carpenter used some of the statement directly in answering some questions from shareholders.

The statement sara me UEB super scheme was a defined benefit scheme. In other words, the company undertook that the fund, while it continued would always be in a position to deliver the benefits the deed provided.

The company was therefore always responsible to see that the scheme was sufficiently funded to meet the obligations under the deed. A decision as to whether the company needed to make contributions at any level, or indeed at all, rested entirely with the company. As long as the scheme was sufficiently funded, and even if this resulted

from good earnings from the fund, the company could cease or reduce its contributions at any time. The statement said the company could use the surplus accumulated in the fund to maintain the fund in lieu of making contributions itself.

"In other words, all the surplus was virtually at the disposal of the company.” In spite of the surpluses building up in the fund, the company continued to make contributions. During that time the scheme was enhanced. The statement said the timing of the termination of the scheme resulted from the wish of the trustees to see that some 600 members who had been transferred out of the scheme as a result of the sale of the UEB packaging operations were fairly treated.

It was agreed that the scheme would be terminated to allow those members to participate in the surplus. Had that not been done, those members would not receive any benefit over and above

their entitlement under the deed.

Division of the surplus has been discussed with the Government actuary, after which the company has given the required notice to wind up the scheme.

Mr Carpenter told a shareholder that the actuary had not yet approved the winding up, but such approvals were not usually given until the scheme was wound up. That process was continuing.

“The company has no doubt that it is fully entitled to the surplus left after the full benefits, plus a share of the surplus has been paid to members,” the statement said. “It also has no doubt that the members are being very fairly treated.” Mr Carpenter said New Zealand Equities would like to have kept UEB intact, but it was clear the carpet and packaging divisions were more viable as part of other companies than on their own.