Commerce Minister Craig Foss today announced the selection of nine KiwiSaver default providers for a seven year term starting in July
Five new KiwiSaver default providers have been announced as part of the Government's first seven-yearly review of the providers.
All of the original providers have also been re-appointed and form the nine-strong list announced today by Finance Minister Craig Foss.
The full list is: AMP, ANZ, ASB, BNZ, Grosvenor, Kiwibank, Mercer, Fisher Funds and Westpac.
The completely new ones are BNZ, Grosvenor, Westpac and Kiwibank. Fisher Funds is also technically new, but did take over the funds management businesses of Tower (originally on the list) last year. A missing name from the list this time is AXA, but it merged with AMP, which had been on the list.
The selections follow a Request for Proposal process that began last year. The tenders were assessed by an independent panel according to a range of criteria including the provider’s organisational and investment capabilities and fee levels.
Foss said it was important that individual KiwiSaver members actively decide how their KiwiSaver funds are invested.
"The purpose of the default funds is as a temporary holding fund. 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," he said.
"It is important KiwiSaver members are equipped with the information to actively decide which fund best suits their individual circumstances taking into account factors such as risk level, fees, investment returns and service.
"As a requirement of their appointment, the KiwiSaver default providers will also offer investor education to encourage people to make this active choice. This reflects the Government’s commitment to build on KiwiSaver’s contribution to developing a savings culture and lifting New Zealanders’ confidence in our financial sector."
In addition to technical criteria, one focus throughout the process was on keeping fees lower than the current default provider fees, in particular for smaller fund 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 current average fee of around $69. There are currently 2.2 million KiwiSaver members with about $20 billion funds under management. Around 22 per cent of all KiwiSaver members are in default funds.
People can compare current KiwiSaver funds’ performance, fees and service by visiting the Sorted’s KiwiSaver Fund Finder calculator. http://fundfinder.sorted.org.