But not everyone has come to the party
Wellington, February 9, 2018
Two of the nine government-appointed KiwiSaver default providers have decreased their fees in response to the review of fees charged.
While seven of the nine default providers did not wish to make any change to fees, I am pleased to see ANZ and Kiwi Bank decrease fees.
This would lead to an estimated $1 million in fee savings for KiwiSaver members over the remaining four years of the current default provider term of appointment.
This review was not primarily aimed at decreasing fees but was scheduled to allow providers to propose fee changes due to unforeseen circumstances.
But I have been very clear that we want to see strong competition between KiwiSaver providers and fees going down.
The cumulative effect of fees and returns can make a big difference to how effective the funds are at providing for peoples’ retirement.
The process for the next appointment of default KiwiSaver providers will start in 2019, and fees will be a significant factor in the tendering and appointment process.
Bottom line, we want people to get the best outcomes for their KiwiSaver money – all New Zealanders should have confidence that their funds are doing this.
I believe that KiwiSaver is generally working well, but I am also keen to see increased transparency.
We need to make it as easy as possible for New Zealanders to engage with their KiwiSaver accounts and make active decisions about the funds that they are invested in and the amounts that they are contributing.
The Financial Markets Authority (FMA) has a useful tool where people can see the combined fee and return information for each KiwiSaver fund and I would encourage everyone to consider their needs and what fund will work best for their individual circumstances.
The Financial Markets Authority tool can be found here.
Kris Faafoi is Commerce and Consumer Affairs Minister of New Zealand.