Click here to view a copy of the KiwiSaver Report for the year ended 30 June 2012.
KiwiSaver is a type of managed fund. It's specifically designed for people who want to save and invest to provide for their retirement.
Many organisations offer KiwiSaver schemes, and most have several schemes you can choose from. Choosing a scheme is an important decision because each scheme performs differently and your savings are not guaranteed by the government.
The best scheme for you will depend on a number of factors, including your age. In general, the younger you are, the more shares and growth investments you should have in your chosen KiwiSaver scheme.
Below are five things you should be clear about when making your choice. Plain English information about these issues should be in the investment statement for the scheme. Every scheme must have an investment statement and it should be given to you before you join the scheme. Read this document before you invest.
Understand what you are committing to
Joining KiwiSaver is a long-term commitment and there are different levels of risk involved with different schemes. Generally speaking, the higher the proportion of shares and other growth investments in your KiwiSaver scheme, the higher your expected returns will be. The younger you are, the more growth investments you may wish to have in your scheme because growth investments generally perform best when held over many years. As you approach retirement, you may wish to increase your proportion of lower-risk fixed interest investments. Before you join, you should fully understand what sorts of investments the scheme will invest in, how much money you will have to pay into the scheme, what fees will be charged, and when and how you can access your savings in the future.
Not be pressured to sign up, or offered some reward
It's important to sign up because you want to - not because you're being pressured by the salesperson. It's against the law to sell KiwiSaver door-to-door. Also be wary if the KiwiSaver scheme is being sold as part of a bundle of other services or with a free offer attached. This isn't against the law but it can be confusing and mean you don't understand what you're getting into.
Receive clear and understandable reports of investment performance
Every KiwiSaver provider must report the performance of their investments separately from the overall performance of their KiwiSaver fund. This is because other factors can affect the fund's performance, like fees. These other factors mustn't be used to create a false impression that the KiwiSaver provider is more successful at investing than it really is.
See fair comparisons with the performance of other schemes
Comparisons between the performance of different KiwiSaver schemes in marketing materials must be calculated on the same basis. Otherwise the information can be misleading. The source of the calculations must also be stated, and it must be made clear if the calculations were prepared by the organisation that prepared the marketing material.
Be told how your money will be invested
Your KiwiSaver provider must be clear about the kind of investments they intend to make, so you can decide if you are comfortable with how risky these investments are. Providers must give their schemes names that reflect their investment intentions.