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Funds fees drop

KiwiSaver fees for the next round of default providers will be significantly lower than those charged at by the schemes at present, particularly for savers with smaller balances.

Tuesday, April 1st 2014, 6:00AM

by Susan Edmunds

The new nine default providers, assigned a seven-year term starting on July 1, are required to keep fees “reasonable”.

Sources said the restrictions on default schemes' fees had been a sticking point for some in negotiations.

The nine default schemes will be run by AMP, ANZ, ASB, BNZ, Grosvenor, KiwiBank, Mercer, Fisher Funds and Westpac.

AMP was charging an annual fixed fee of $35.40 and 0.53% in variable fees for its default scheme last September. From this July, it will charge $23.40 and 0.39%.

OnePath’s default KiwiSaver scheme was charging $33 a year and 0.44% in variable fees. In its new term as a default provider, it will charge $24 and 0.6%.

Mercer’s KiwiSaver fees will change from $34.20 and 0.53% to  $30 and 0.56%.

No default provider will charge more than $30 a year in fixed fees of 0.6% in total variable fees in the new default term.  Those figures include an estimate of any underlying fund fees and expenses.

Bruce Kerr, of Workplace Savings NZ, said there would be pressure on providers to keep fees reasonable. “Whether they have to cut them much depends on the regulator’s view of reasonable.”

Some industry sources suggested that the requirement to provider investor education would be welcomed by the default schemes because it would give them the chance to move savers from low-fee conservative default funds to more expensive options. Many growth funds are charging up to 1% in variable fees and up to $50 a year in fixed fees.

John Berry, of Pathfinder Asset Management, said default providers should be required to pay for the status, and the money used to pay for the regulatory activity of the FMA.

“The benefit is now not as great as it was at the start but the next big thing will be if and when it becomes compulsory. If it’s made compulsory there will be massive value in being a default scheme.”

« Fees still too high: MorningstarSilver start for KiwiSaver scheme »

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Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
ANZ 5.19 4.05 3.95 4.49
ANZ Special - 3.55 3.45 3.99
ASB Bank 5.20 ▼4.05 ▼3.95 4.39
ASB Bank Special - ▼3.55 ▼3.45 3.89
BNZ - Classic - ▼3.55 ▼3.45 3.99
BNZ - Mortgage One 5.90 - - -
BNZ - Rapid Repay 5.35 - - -
BNZ - Std, FlyBuys 5.30 4.45 4.35 4.55
BNZ - TotalMoney 5.30 - - -
China Construction Bank 5.50 4.70 4.80 4.95
China Construction Bank Special - 3.19 3.19 3.19
Lender Flt 1yr 2yr 3yr
Credit Union Auckland 5.95 - - -
Credit Union Baywide 6.15 4.95 4.95 -
Credit Union North 6.45 - - -
Credit Union South 6.45 - - -
Finance Direct - - - -
First Credit Union 5.85 3.99 4.49 -
Heartland 6.70 7.00 7.25 7.85
Heartland Bank - Online - - - -
Heretaunga Building Society 5.75 4.80 4.95 -
Housing NZ Corp 5.19 4.15 4.09 4.39
HSBC Premier 5.24 3.35 3.35 3.35
Lender Flt 1yr 2yr 3yr
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 5.15 3.18 3.18 3.20
Kiwibank 5.80 4.30 4.24 4.74
Kiwibank - Capped - - - -
Kiwibank - Offset 5.15 - - -
Kiwibank Special - 3.55 3.49 3.99
Liberty 5.69 - - -
Napier Building Society - - - -
Nelson Building Society 5.70 4.69 4.79 -
Resimac 4.50 4.86 3.89 3.94
Lender Flt 1yr 2yr 3yr
RESIMAC Special - - - -
SBS Bank 5.29 4.85 5.05 5.49
SBS Bank Special - 3.65 ▼3.39 3.89
Sovereign 5.30 4.15 4.29 4.55
Sovereign Special - 3.65 3.75 4.05
The Co-operative Bank - Owner Occ 5.15 3.49 3.59 3.89
The Co-operative Bank - Standard 5.15 3.99 4.09 4.39
TSB Bank 6.09 4.49 ▼4.29 4.85
TSB Special 5.29 3.69 ▼3.49 4.05
Wairarapa Building Society 5.70 4.85 4.99 -
Westpac 5.34 4.15 4.09 4.49
Lender Flt 1yr 2yr 3yr
Westpac - Offset 5.34 - - -
Westpac Special - 3.55 3.45 3.99
Median 5.34 4.05 4.02 4.05

Last updated: 21 October 2019 9:16am

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