BNZ keen for default status in KiwiSaver
The new KiwiSaver kid on the block, BNZ, wants to become a default provider but rejects calls that it should put new, young members automatically into riskier funds.
BNZ, Kiwibank and Westpac missed out on default provider status last time - BNZ because it did not have a scheme.
Now the three banks want to join the existing six default providers and win a share of new members who join without picking a KiwiSaver fund.
The Government is reviewing its KiwiSaver default options and considering switching close to half a million people from the conservative cash and bond-heavy default funds into "life steps" funds that would automatically adjust the asset mix from more-risky to less-risky over time.
Onepath, Tower and Mercer want the Government to scrap the conservative settings on the basis that younger people would do better in share-heavy funds over time.
Several providers say strong returns from conservative funds in the last five years are unlikely to continue as market conditions improve.
The three wanting to become default funds and existing default providers AMP and ASB disagree that life steps is a good setting.
Acting CEO Anthony Healy said BNZ, the last of the big banks to join the KiwiSaver business, was not building a life steps product for its scheme ahead of its February 25 launch because it was better to educate people so they could choose.
"We think it takes people away from making active decisions. You can't lump everyone into a life stage and say they all look the same."
- © Fairfax NZ News