Most people picking their own KiwiSaver managers
A report on the uptake of KiwiSaver shows that there has been a significant shift towards automatic enrolments and people are selecting their own managers.
Friday, March 14th 2008, 7:49AM
A number of speakers at a recent Conferenz KiwiSaver conference in Auckland expected there would be a spike in enrolments after April 1 when employer contributions become compulsory.
Under a staged programme employers will have to contribute 1% in the 2008-09 financial year and that will increase to 4% over the next four years.
A six-monthly report on KiwiSaver was released yesterday. While it primarily focussed on awareness and implementation issues it had some useful data on other areas.
It shows only 33% of people ended up in default schemes and 56% actively choose their own manager.
This is also seen in figures published by ASSET Magazine which show non-default providers such as Westpac, Gareth Morgan and Fisher Funds had been successful in attracting clients.
While managers spent a huge amount of time and effort encouraging employers to pick them as their "preferred provider" only 11% of KiwiSavers ended up in a scheme through this route.
The report says that when this information is broken down according to membership type it is clear that those members who have opted-in are more likely to have made an active choice of scheme and automatically-enrolled members are more likely to be allocated into default schemes or to join an employer-nominated scheme than to choose a scheme themselves.
It is possible that the decision on the part of opt-in members to actively choose a scheme provider is influenced by the characteristics of these members, namely that they tend to be older, with higher-incomes and therefore perhaps more consciously thinking about retirement or active in their financial management.
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