KiwiSaver likely to have high fees: Aon
The government’s KiwiSaver workplace savings scheme will probably have much higher fees than existing superannuation schemes, says Aon consulting.
Wednesday, June 15th 2005, 6:41AM 
1 Comment
by Rob Hosking
“There is quite a bit of flexibility in terms of people being able to change fund manager; change the fund they are in; take a contribution holiday, that sort of thing.”
Other factors include the link to the home buyer package, which allows people to draw on some of their savings for a deposit.
”The providers are going to have to have systems tracking what goes where, and some of the things being thrown into the mix are not being catered for by existing systems.”
The other factor for providers is the high number of small transactions.
The government intends to provide a subsidy for the scheme’s fees. Those are to be capped ie: it will be on a per person per year basis.
Just what that will be is still subject to negotiation by providers. At present the government has allocated $500 million a year.
The official “regulatory impact statement” accompanying the Cabinet papers shows that the government considered totally subsidising fees as this “would increase the total lifetime rate of return by around 1.2% per year after tax”.
The same document warns that “a fee subsidy alone may not be sufficiently attractive to encourage participation.”
KiwiSaver is due to start in 2007. Negotiations with providers are scheduled to start later this year.
Rob Hosking is a Wellington-based freelance writer specialising in political, economic and IT related issues.
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According to Campbell Live (18/4/11) Aon have refused to allow a Christchurch member caught up in the earthquake to withdraw desperately needed funds from Kiwisaver. After some badgering they have agreed to pay out 40% of the funds invested.
But only after unnecessary hassle. They need more and they should be entitled to access their funds. Aon are simply not a good community orientated company. They should be ashamed of their decision not assist this member.
Maybe a boycott of Aon would help improve their community orientation??sure I would want to place ANY investment with Aon KiwiSaver.
Member impacted by the Christchurch Earthquake (as reported on Campbell Live this evening) -- what an utter bloody disgrace.
Aon should be ashamed of their treatment of this customer. I am sure employee's of Aon feel very good about working for such a caring company.
Is management not aware of how negative comment about a business is passed on rapidly from one individual to another???
Suggest management watch comment on social media over the next few days -- maybe a page or two on Facebook highlighting Aon's caring attitude.
Nice one Aon. Pleased I am not a customer -- and never will be.
T.Moodie