Govt appoints KiwiSaver default providers
Nine institutions have been selected as "default providers" for new KiwiSaver members who do not nominate a place for their savings.
AMP, ANZ, ASB, BNZ, Grosvenor, KiwiBank, Mercer, Fisher Funds and Westpac will hold their default status for the next seven years form July, Commerce Minister Craig Foss announced today.
Unless savers nominate a fund, Inland Revenue allocates new KiwiSaver members a default provider or puts them with their employer's scheme if the employer has chosen one.
About 22 per cent of the 2.2 million KiwiSaver accounts are in default funds.
Foss said tenders for default providers were assessed by an independent panel which looked at their organisational and investment capabilities, and fee levels.
Foss said it was still important KiwiSaver members actively decided how their KiwiSaver funds were invested.
"The purpose of the default funds is as a temporary holding fund," he said.
"They have a conservative investment approach aimed at providing stable returns and maintaining and building confidence in KiwiSaver while members consider the best fund for them."
The panel also actively tried to keep fees lower than default-provider fees, particularly for smaller balances.
For a typical $7000 balance in the new default funds, the total fee will be on average approximately $56 a year compared to the average fee of around $69.