More than 19,000 investors signed up to KiwiSaver last month bringing total membership close to 1.85 million, according to default provider Tower in its latest monthly release on KiwiSaver.
Tower CEO Sam Stubbs said the last time monthly enrolments levels were that high was in August. He suggested the November hike in numbers was likely due to KiwiSaver being put on the radar screen in the run up to the election.
“The monthly new membership rebound was impressive primarily because November was a general election month and KiwiSaver had become a political football, with political parties competing to propose yet more changes to the scheme. The jump in new enrolments may have represented KiwiSaver being top of mind with voters because the politicians were talking about the scheme so much.
KiwiSaver members opting in via their a provider were up by 1% and those automatically enrolled through an employer 1.3%.
Stubbs suggested the lift in auto-enrolments might have to do with retail employers in hiring mode in advance of Christmas.
National's re-election last month confirmed a number of key changes for KiwiSavers including member tax credits being halved this year from $1043, to $521, taxation of employer contributions (effective April 1 2012) and an increase in employee and employer contributions from 2% to 3% in 2013. (For full details on Budget 2011 changes to KiwiSaver click here).
“Perhaps this is a good thing, as with KiwiSaver a rest is as good if not better than a change given how often the scheme has been altered to date and the impact this perceived instability has on public confidence in KiwiSaver as a long-term savings vehicle,'' said Stubbs.
Another key issue facing investors next year will be the partial privatisation of state owned entities, of which providers are eyeing a generous stake.
Stubbs said default provider Tower would be jumping on the opportunity to invest its KiwiSaver funds into these partially privatised SOEs "because of the healthy dividend streams that would likely be forthcoming” (See also our web-interactive with fund manager Brian Gaynor of Milford Asset Management talking about SOEs and KiwiSavers).
Stubbs said the attractiveness of the offer would depend on the price being offered.
“A major factor in the appetite for investing our KiwiSaver funds into partially privatised SOEs will be whether the asking price for the initial public offering looks fair and reasonable.”
“If the offer price for SOE flotations is too rich, that could put a dampener on demand from KiwiSaver schemes, with fund managers tending to favour waiting for prices to fall post-listing.''