Hon Kris Faafoi
9 February 2018
Two of the nine government-appointed KiwiSaver default providers have decreased their fees in response to the review of fees charged.
Minister of Commerce and Consumer Affairs Hon Kris Faafoi says that while seven of the nine default providers did not wish to make any change to fees, he was pleased to see both ANZ and Kiwibank decrease fees. This would lead to an estimated $1million in fee savings for KiwiSaver members over the remaining four years of the current default provider term of appointment.
“This review wasn’t primarily aimed at decreasing fees but was scheduled to allow providers to propose fee changes due to unforeseen circumstances,” Mr Faafoi says.
“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 Mr Faafoi says 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.”
Mr Faafoi says while he believes that KiwiSaver is generally working well, he’s 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 FMA has a useful tool where people can see the combined fee and return information for each KiwiSaver fund and I’d 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.