Budget's KiwiSaver changes welcomed
The KiwiSaver industry has largely welcomed the Government's latest changes to the retirement savings scheme, announced in the Budget.
From next April, KiwiSaver providers will be required to report their performance, fees and a whole range of other information in a standardised format on their websites.
The Government will also review the current default provider scheme, where savers are allocated one of six approved providers unless they make an active choice about the provider they want.
And the Government has deferred its plan to auto-enrol all New Zealand workers in the savings scheme, originally intended to occur in 2014-15.
Retirement Commissioner Diana Crossan said she was pleased there were no fundamental changes to the scheme.
"Any improvement in disclosure which enables New Zealanders to compare KiwiSaver funds is a positive move."
The commission was particularly pleased that the disclosure would be in a standardised format, something it had been lobbying for. "That's a huge breakthrough.
"If people can't compare products no amount of financial literacy is going to help them."John Body, of ANZ Wealth, said that, as a KiwiSaver provider, it had been preparing for regular periodic reporting requirements for some time. "[Yesterday's] announcement by the Government gives us certainty about when they will take effect."
ANZ would be actively taking part in the default provider review.
"One of our recommendations will be that the default investment option for KiwiSaver is changed to the "lifetimes" approach (where the asset mix of a fund changes as a person ages) rather than conservative funds."
KiwiSaver provider Mercer also applauded the absence of any more tinkering.
However it was concerned that the Budget failed to address the looming issue of retirement funding, New Zealand head Martin Lewington said.
"Mercer is disappointed the Government has deferred auto-enrolment ...
"Clearly, there is public support for the scheme and the more people who are in KiwiSaver, the less reliance [they are] on the Government," Lewington said.