KiwiSaver industry calls on government to provide certainty on the scheme and to stop making constant and costly changes

KiwiSaver industry calls on government to provide certainty on the scheme and to stop making constant and costly changes

By Alex Tarrant

Certainty from the government on what plans it has for KiwiSaver would be nice, a group associated with the industry says.

David Ireland, a partner at Kensington Swan, and also chair of Workplace Savings NZ, says the constant changes to KiwiSaver have presented profitability challenges for the providers as they deal with new costs and the uncertainties that arise from government saying it will make changes to the scheme.

Finance Minister Bill English has indicated changes will be made in the upcoming May 19 Budget as government looks for ways to tighten public spending, but also promote private savings.

Yesterday, Ireland said the industry was worried government would make changes to some of the top incentives that have drawn people into KiwiSaver, such as Member Tax Credits and the Housing New Zealand First Home Deposit subsidy.

“From the industry side, there’s been constant change – every few months there’s another regulatory change providers have to deal with,” Ireland told interest.co.nz.

“In some ways you would like them to just do it in one sweep – ‘these are the changes, and then we’re going to leave it alone’,” he said.

Certainty would be nice, Ireland said.

“The only certainty we have at present is that there will be continuing uncertainty, because we don’t know what’s going to happen,” he said.

“It’s just been constant, constant change, so really hard for the providers – it just builds in layers of cost for the providers to respond to it [the constant change] which drags down the performance of KiwiSaver or the enthusiasm [for it].

That made the profitability equation for providers “fairly challenging,” Ireland said.

Asked by media whether the constant changes by government to KiwiSaver would be detrimental to the public’s perception of the scheme, Finance Minister Bill English said today he did not think so.

“People, if they want to save, they will save, and that’s what they’re doing. The good news is our savings rates are increasing, and we want to keep pushing in that direction,” English said.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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2 Comments

I absolutely AGREE with David Irelands sentiments ---- It is a sound and needed scheme which at the end of the day assists with benefits, to not only the individual but the whole country.

The only experience I have is that I invested in a Property Based Superannuation Scheme--30 years ago--and slowly put any spare money into it --and it has enabled me to "retire" at 60 .

Governments come and go --but have a record of being Tinkerer's --- sometimes systems are improved but sometimes not.

STABILITY and Dependability of the scheme --is definitely needed----and without a Government  shifting the goal posts. (without sound reasons.)

One other thing is that many people, I have talked to, do not know how or where to access performance of their personal Kiwisaver Fund.

The only Place I know for Kiwisaver Comparative Performance Results, is the Business Section of the Sunday Star Times-- where a Summary is presented on most funds by Morningstar.

These Performance Results needs to be publicised more, to get NZr's more financially literate, and aware of how their own fund is going.

Me too....this is a story Ive heard time and time again from various industries....Pollies constantly changing the rules.....it seems they consider volitility worse than "too high" Kiwisaver doesnt seem very profitable for most.....but its a game you have to play....

regards