Eye on providers at annual report time for KiwiSaver

Hundreds of thousands of KiwiSavers will receive their first annual report in the post this week.

As with other unit trusts or investment vehicles, the 33 KiwiSaver providers are required by law to send members a yearly statement setting out their account balance and various contributions at the end of the scheme year [March 31].

Most providers go a little further in keeping their members informed with quarterly reports and daily unit prices, but some are sticking to the bare minimum, raising concerns about investment transparency.

"Many KiwiSavers don't have a clue what's happening to their money: their contributions, where they are being invested and what they are worth," Andrew Gawith of Gareth Morgan Investments said.

"Given the problems of getting KiwiSaver contributions flowing through the system and ensuring members are getting what they are entitled to, a much higher level of reporting by providers than the annual account statement would seem something the Government might have insisted on for at least default providers."

Gareth Morgan Investments abstained from reporting daily unit pricing information for members, preferring to distribute material that was simple to understand for ordinary people, he said. "This level of transparency is fundamental to managing peoples' savings. If you were managing your own savings, this is how you would keep track of them - simple and understandable."

Cynthia Church, head of corporate affairs at investment house ING, said that other than online account viewing, ING stuck to the bare minimum. Just the sheer volumes of KiwiSaver made getting the end-of-year statements out on time a massive undertaking, she said.

AMP KiwiSavers get quarterly returns and market commentary, along with transaction summaries and online tools, but manager of wealth management products Tracey Lee Pettifer said "we can always do more".

Westpac's fund manager BT Funds Management, meanwhile, quoted research that indicated Australians only wanted to be contacted a couple of times a year by their superannuation provider.

Chief operating officer Fiona Oliver also hinted at cost implications for providers. "Members are aware that each time they receive mail, it costs money and this expense could be passed on to them, ultimately reducing their retirement savings," she said.

Tower Investments chief executive Sam Stubbs, however, said it was reasonable for savers to expect a monthly report.

- © Fairfax NZ News