Five-fold Friday: KiwiSaver tool-kit; PPI malarkey; Chch rate relief; financial cockroaches; STINKRS and trust busting

Five-fold Friday: KiwiSaver tool-kit; PPI malarkey; Chch rate relief; financial cockroaches; STINKRS and trust busting

Financial cockroaches like Western Pacific and Bernard Whimp are hard to get rid of.

By Amanda Morrall

1) Savings and Spending

John Key set tongues wagging this week over KiwiSaver with the official word that yes, those generous incentives are richer than New Zealand can properly afford. It remains unclear how tight the belt will be cinched at the May 19th budget, but without a doubt Member Tax Credits are getting pinched. It's just a question of by how much.

It's a good time to check in with your KiwiSaver account and see what's what. Here's a few websites to bookmark.

Inland Revenue tracks yours and your employer's contributions, also the government's share so you can see how it's tracking along. You'll need to register with the IRD but that takes but a minute.  Here's a link to their KiwiSaver section.

 If you want to see how your fund has performed, phone your provider with your membership or account number in hand. Account details should be posted to their websites once you've registered although the level of disclosure ranges because there is no uniform standard on reporting. 

You can also check out our new performance ranking section here to get an indication of how your fund has performed over the past three years, but a big reminder that past performance is no indication of future returns so by no means are we  encouraging you to chop and change providers on the basis of a quarterly result.

Research house MorningStar also provides a benchmark performance report on a quarterly basis as well. You can see their latest report here.

2) Credit and Debt

Seems the tables are slowing turning -- albeit at a glacial pace -- on banks and other financial institutions who've been creaming it all these years.

Payment Protection Insurance (PPI) on debt is one of these rackets banks have gotten away with for years selling customers insurance that they either didn't understand, weren't aware of it being built into products or which had dubious value.

Ostensibly, PPI is meant to cover your butt, should you be unable to make good on your debts. But like a lot of insurance, the devil is in the details.  In Britain, a customer revolt over the issue has had a happy ending for the underdog. Lloyds Bank has been forced to cough up 3.2 billion pounds for improper marketing of PPI products. 

Read about Antonio Horto-Osorio's just desserts here.

The scandal has some implications for National Australia Bank as well. You can read about that here.

3) Real Estate

Earthquake affected homeowners and businesses in Christchurch are expected to find out in June what's going to happen to their rates. The outcome has huge implication for residents and Christchurch City Council, which derives 50% of its revenue from 158,000 ratings assessments:13,000 businesses, 3,000 rural and 142,00 residential and others. 

Late last month, council announced it would be extending its rate relief to those hardest hit by the earthquake. 

Those who meet the qualifying criteria get a 30% or 40% remission on their rates for a four month period. It breaks down as follows:

  • 40% rates remission for residential and non-rateable properties damaged by the 22 February earthquake and/or that are unable to be occupied from the date the property became unable to be occupied until the earlier of reoccupation or 30 June 2011.
  •  30% rates remission for business properties demolished or classified by Council as R1 (significant damage repairs strengthening possible) and R2 (severe damage demolition likely) following the 22 February 2011 earthquake from 22 February 2011 until the earlier of 30 June 2011 or the property is able to be occupied.
  • 30% rates remission for business properties classified by Council as R3 (unsafe due to adjacent property) following the 22 February 2011 earthquake from 22 February 2011 until the earlier of 30 June 2011 or until the property is able to be occupied.
  • 30% rates remission for business properties located within the Red Zone as at 28 April 2011 following the 22 February 2011 earthquake from 22 February 2011 until the earlier of 30 June 2011 or the property is able to be occupied. 4 September and 26 December 2010 earthquakes, offering the worst-affected residential and commercial properties between 30% and 40% remission.

Christchurch City Council estimates the cost of extending the rates relief policy to cover damage caused by the Feb.22 at between $NZ2.188 million and NZ$3.297 million. The uncertainty related to the number of residential properties that may be demolished or abandoned during the current rating year.

For applications for residential and commercial rates relief click here and scroll down to the bottom of the page for pdf applications.

4) Death and Taxes

In the event of a nuclear holocaust, I've heard cockroaches will be the only species to survive. Not sure how accurate that is but based on the invincibility of the roaches that have taken over my house recently, I suspect there's some truth it.

We've had more than a few financial roaches cross our desks recently, one of them Western Pacific Insurance, which looks to have left 155 of its 7,000 clients in the lurch because of shoddy management practices.

WPI director Jeff McNally went begging to Government in March asking for a NZ$5 million guarantee so it could dig itself out debt after reinsurers told them to take a hike for their inability to pay a $1 million excess on claims pay-outs. (Read about WPI's tale of financial woe here and be sure to read the links to their Dear Bill bail-out request and Treasury's PFO response. )

What's a tad more disturbing is the cockroach theory, the non-scientific market theory that suggest bad news of this nature is symptomatic of a larger problem. That certainly rang true with finance companies, so perhaps reason for caution in matters of insurance too.

To lodge a complaint about against someone offering financial services or advice without registration, click here.

5) Books and Film 

Here's a new term to add to the growing lexicon of acronyms: STINKRS.

You'll find them queuing in the hallways of the Family Courts or buzzing outside the offices of trust law specialists.

Separated, Taken to the cleaners, good Income, Not Keen on a Repeat -- or becoming part of the GST club, that exclusive gentlemen's club of unlucky in love rich guys three-times done over and left with 12.5% of their original assets. They're a staple of New Zealand's thriving trust business and now a defending party of the sacred trust. (See Amanda Morrall article on tales of trust and woe here).

Jonathan Cron, in his book ''Family Trusts in New Zealand'' suggest 75% of all trusts in New Zealand wouldn't stand a chance in court were they to be challenged -- mainly for lack of compliance.

They'll stand even less of a chance depending on the outcome of a key ruling due out this year.

(For detail see this article by our contributor Michael Coote).

We welcome your comments below. If you are not already registered, please register to comment.

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.

41 Comments

The GST club, very good I hadn't come across that one before. I have heard some good stories where the gold diggers got burnt though.

One soldier nearing his 20 years service, and associated retirement benefits, was faced with paying for maintenance for five children while his ex had taken up residence for another soldier. A common terminal benefit package was to take the first 20 years of the pension in a lump sum, after those 20 years you qualify for a pension on top of government super you also receive at 65. This digger was face with losing more than 50% of the lump sum because ex had the kids, but was also going to lose the rest as forward payment of the pension he was to receive after 20 years, which she was entitled with it being matrimonial property.

Ex jumped the gun though because he hadn't completed the 20 years yet. Digger resigns a year early, receive only terminal B benefits. He also chooses all the worst possible options so that ex receive bugger all, perhaps 20% of what she expected. 

Solder also went to ground and worked for cash so she received the minimum child support. I guess he figured the new fella could take care of that.

 

Bloody battlefield out there. Horror stories like that abound.

Read the link to my Press story I included on trusts. Top dog NZ judge who wrote the book on trusts (literally) got done over himself. Love blinds its victims I guess.:) 

http://www.stuff.co.nz/the-press/lifestyle/2770156/Trust-issues

Almost farcical if it wasn't so sad, usually the kids are the one's who pay for all this feuding.

Sigh.

I made the comment the other day about children being used punitively. Really sad.

Unfortunately I have personal experience of that.

Pays to be poor. My financial squabbles with the ex are relatively simple if toxic. Stand-downs over who will pay for school outings and lost fleeces Pathetic really. Om shanti, shanti, shanti. 

Yes I agree, the money is nothing compared to psychological well being of children.

A shame the familiy court can't get their head around that and separate the two. I even had judge say to me that if I wanted to get a shared parenting agreement, then I needed to earn more money. Never mind that she was on the DPB, and the existence of such was a contributing factor in being able to walk away. With the kids I might add, which both WINZ and the family court have supported.

Pretty much written out of my life for now. Just have to wait 5-10 years for them to grow up and realise what happened. One hope is that they are heading in the right direction education wise, and are likely to do okay in the long run. I had a good run with them and set the foundation, so I am over being angry. Took a while though.

Defeating anger is no small feat. Sounds like a raw deal though but I expect your approach is a sound one. Thank God for Kodak and memory. :)

 

I guess my question is, how do I get my money out of Kiwisaver now? Or do I just have to accept that I am being taxed and extra 2% till I am 65 and say good-bye to it?

Seriously I need some advice.... Thanks 

Hi Mandalay,

Only an Authorised Financial Advisor is allowed to give you advice on that. But here's more on how to take a holiday (though they're only temporary - 3 months to five years) as some point, all holidays, even KiwiSaver, must come to an end, sadly.

Here's a link to IRD's website on the subject, it explains in general terms how to take a holiday.

www.kiwisaver.govt.nz/already/change-contrib/contributions-holiday/

You'll also find some info on that on our Q&A section on KiwiSaver...http://www.interest.co.nz/kiwisaver/questions-and-answers

I'm guessing AFA will probably suggest its wise to stay invested unless you have a better investment alternative or a big inheritance headed your way.

Hope that's helpful. 

Amanda

Thanks Amanda I appreciate your input. The reality is I have been duped by our government to pay extra tax... If I do take a kiwisaver holiday, it will no doubt be whittled away in service fees, which are a rush too as my provider has made the spectacular growth of 1% on my money. Service fees were higher then the growth... sigh! Now I have to foot the bill for Christchurch, SCF and who knows what other National croonie payouts! I feel so ripped off!

Don't get upset mandalay...join the National Party and be in on the rorts and scams...and if it all turns to shite you can count on a bailout if you're too big to fail...!

Hahaahaa... I want to weep! Alas - under the present regime I am too little to succeed ...

National Party - Robbing from the hard working and struggling Kiwi family, to pay for the wealthy few's tax cuts! because as we know it is only the rich who keep this country moving forward... the middle-class are just the majority in the way of real growth!!!

 

Oh yeah before people get shirty with me about my grumble about Chch... it's not a whinge against the rebuild - we need to spend money there, it's a gripe against the bloated government rebuild machine!

Don't go all weepy on us Mandalay...open a Kiwisaver a/c and be in to lose what little you have to the political time machine..feed a fund manager's fat income...better still put it in Kiwi Bank on a term deposit and watch as the planned debasement destroys the value...or just go out and blow it before it turns to shite.

The economy has been thoroughly stuffed by decades of moronic policy making BS and political scamming vote buying corruption.....sit back and laugh at the fools as they dream up yet worse ways to run the place.....

Europe is moving along nicely to the cliff edge and Jewleeya's mob across the ditch are doing a great job on the economy too....Bernanke has reached the corner of the roof he has painted with banknotes and insists that he alone has the answers if only you will wait till next year to be told....

Ready yourself for the grandmother of all financial collapses....where it will start is the only unanswered question. 

too late Wolly, they duped me... now I've got bunches of money I'll never be able to access... I'm pretty peed off... but rather learn now then in 10 years, when there's enough money to buy a house and I still won't be allowed to touch it!

 

We're all going on a kiwisaver (read best government con) winters holiday!

"Bunches of money"...no longer exists mandalay...in ten years it will have lost about 40% of the value it had on day one...houses will cost about 100% more to build...so you would have to leap across that gap even if you could get hold of the loot....but don't worry mandalay because there will be a friendly bank prepared to help you bridge the gap.....

Try and find Ian Wisharts old Investigate article on the unconstitutional nature of income tax. It isn't actually required to have an IRD number.

I would say you made an error of judgement joining Kiwisaver because they are not going to let you out.

Best solution I can see is to get rid of your IRD number, therefore you can't pay tax. Might be a struggle to get out of it though, now that you have linked your IRD number to Kiwisaver.

Saturday reading for you all...exposes the bulshit to sunlight...try to avoid the smell...

 http://www.marketoracle.co.uk/Article28098.html

Wolly, when are you going to come pay us a visit at interest.co.nz????

I'll blow my budget and treat you to a fair trade coffee that smells divine.:)

Damn it I think I'm gonna cry now...............( :>( 

What, like a date ?  

Amanda knows she'd be safe...apart from being hundreds of miles to the north of me and it being a costly trip for a cuppa...having a coffee with an OLD teacher has got to be ok...never know what she might learn!

Wolly.....have you been using those Chippendale pics on your profile page again...?

What "page" is that....snot me so it's some other sod...are you having a Budget party Count...BS crackers with English cheese and some Smiley Wavey plonk ?

The  BS crackers are unavoidable since entering the food chain but I will pass on the cheese n plonk.........gonna git me some moonshine...a great antioxidant for the retentive BS.

P.S. in your account you have a profile  page where we can look at the pretty pictures of each other.........mine needs an update as you will see.

Couldn't resist checking out your picture :) Will have to check everyone's pic for a laugh now that you've reminded me about them!

You give us all at least three good roaring laughs a day Wolly. Least we can do is buy you a coffee. I'll put down my notebook, my Grandmother (RIP) gave me enough of those lectures to last a lifetime and Bernard can be my chaperone. haha!

Did you make it into the GST club Ivan? :)

Of course, some folk have trouble working out which way is up.

Amanda is demonstrating a sense of social responsibility, which is to be admired, not condescendingly, patronisingly, put down.

 

 

Kiss her shoes (virtually) as much as you like, she is not going to go out with you... :D

Would have expected anything less from a one trick pony?

regards

The guy's a hoot.....I just know someone has terminal blinkers when they spend every opportunity dis-ing an alternative economic theory (Keynes).....then of course he goes through and says what keynesians believe etc etc.....and they are so wrong etc etc....blah.

But there are some nuggets in there.....

I dont agree with the Fed that its the developing world having strong economic growth though....if they say that, well I just dont believe them...its simple they only care about the USA....and really when you look at the waste inside the US v how little its looks after its poor let alone the rest of the world I dont think thats an unfair conclusion.   Sure US banks using cheap Dollars are driving some developing world inflation....but that can only be driven where there is scarcity.....its opportunistic not creationalist IMHO....

"Interestingly, Liesman said that if the Fed did in fact tighten monetary policy and slow economic growth, that wages and prices would fall. In this case, he asserted, inflation-adjusted prices would not be changed at all. He said that "prices [would be] coming down, even though … wages are coming down too, and the actual affordability of the thing that's coming down hasn't changed … at all … so there's an asymmetry out there."

LOL....thats a great way of not saying something........Trade speak for "if we tighten we get a Depression".....so the Fed see's the elephant....so the OCR etc is going nowhere....anytime soon....

"asymmetry out there" indeed....and its been commented on for a long time.....automaticearth for one see's this (and I agree).....the answer to that of course is because we have supply cost constriants they cant drop in price, so the result is either the prices increase OR the supplier goes out of business and ppl lose jobs....and ppl without jobs sure earn less.....hence "asymmetry".

"if there were no printing of money, commodities prices would fall at a much faster rate (because they have been rising at a much faster rate)" just huge assumptions there.....he's ignoring any scarcity....etc...etc.

regards

Good piece Wolly. Not all of his commentaries add up, but that one is pretty straight forward. Pretty much the conclusion I came to about how it all works from picking up an encyclopedia. Takes a bit to get your head around some bits, but it makes perfect sense in the end.

I would like him to bring velocity into it as I understand that, despite Bernanke's printing presses, it is decreasing. Need to find a graph of it.

Wolly, if it isn't too personal I've been wanting to ask what did you used to teach?

So you also wake at Sparrow fart JD.....I blame it on the Moon....privacy is so important....!

It matters not the 'what' more than the 'why'.....but the system really is a sausage factory JD...you should give it a go...discover the limitations of ERO and Tolley and the MoE.

I'd already taken my dog for a 3k walk, had a coffee, fed the chickens and rabbits and read the news by the time I posted that, lol. I prefer to take the pup out and about before anyone wakes up, that way we have the river to ourselves and I don't need to put her on a lead. It means we walk in the dark but I have a nifty pocket torch.

I still want to know the what. You could PM me. :)

Hmm, guess you can't, I don't see a PM setting...

Nah...you don't really wanna know....meaningless anyway...hey how do you know where the dog poops if out and about before dawn?

If you're in wgtn, do let the dog try out  the lawn in front of Parliament...or the weeds near the RBNZ on the Terrace.

Lol on where you want my dog poop. As it happens, this morning she went on the west side of the stop bank in the long grass (nobody walks there so it doesn't matter). I carry a torch, remember. Most of the time she's slightly in front of me where I can see her, or else not far behind. It helps that she has a fawn coloured bum, haha.

That'll be the Hutt river right....used to float down that on kapoc mattresses as a sprog and hoik eels out with the help of a prong ended pole...in them days the trout were edible too...then the buggers moved the river to fit in a road which they built right smack on top of the fault line...go figure. These days it aint safe to walk there...too much dog poo.

Gosh Ivan, where does all the rubbish come from!....last time I was there just a few weeks ago the dog crap was all over the show... Ahhhh holidays...no work and lots of fun for weeks and weeks and weeks.....full pay too....best of all is watching the 'Ivans' of this world still working..hahaha

 

Wolly, thanks. You are one of the rare locals around here. Too many of the posters here are foreigners, blow ins, pontificating on how to fix the place. Very few would have that experience. About catching eels that way. We used to catch 6 footers to cook up and feed the farm dogs up in Kaukapakapa. The local auckland maoris used lengths of sharpened number 8+ fencing wire, trawling up and down the Whau creek, up to their waist.

Used to catch them with a pole and some wool pack jute wrapped around a piece of dog tucker. Walk down the creek till you find a dead sheep and keep the pressure on once they bite, great fun, my children do the same.

"You people?" besides, I think he's retired, Ivan.