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KiwiSavers' missing millions

KiwiSaver members in default schemes may have missed out on as much as $200 million in performance returns over the past 12 months because they are not in the right scheme.

Wednesday, January 21st 2015, 6:00AM

by Susan Edmunds

Almost 50 per cent of the 2.3 million people in KiwiSaver are in low-risk, conservative or cash funds. Twenty per cent of members are in one of the nine default funds they are automatically enrolled into when they join the scheme.

ANZ general manager of wealth products and marketing Ana-Marie Lockyer said someone earning $55,000, contributing 3% of their salary, matched by 3% of their employer’s salary, would have increased their KiwiSaver balance from $10,000 at the beginning of 2012 to $25,619 at the end of November 2014, if they were in ANZ’s conservative fund. If they did the same thing in the bank’s growth fund, they would have $30,668, or $5000 more.

The employee’s own contributions made up 60% of their balance in the conservative fund, but only 50%in the growth fund.

“We believe that being in the right fund can make a big difference to reaching your retirement savings goals, given this difference over a short period of time recently.  Most of us will have our savings for 45-plus years so depending on long-term performance factors you can see it will make a big difference,” Lockyer said.

Lockyer called for a lifetime approach for default schemes where an investor’s risk profile was adjusted to fit their stage in life.

She said if default scheme members were put on a lifetime rather than conservative approach, they would have been a combined $200 million better off over the past 12 months.

“This is a significant number and a slice of this may belong to any default member who has not taken the time to confirm if the fund they were defaulted into is right for them.”

« Advisers told to take KiwiSaver opportunityFind the right fund fit: Morningstar »

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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
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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 -
HSBC Premier 5.24 3.35 3.35 3.35
HSBC Premier LVR > 80% - - - -
Lender Flt 1yr 2yr 3yr
HSBC Special - - - -
ICBC 5.15 3.18 3.18 3.20
Kainga Ora 5.18 4.04 3.95 4.39
Kiwibank 5.80 ▼4.14 ▲4.30 4.64
Kiwibank - Capped - - - -
Kiwibank - Offset 5.15 - - -
Kiwibank Special - ▼3.39 ▲3.55 3.89
Liberty 5.69 - - -
Napier Building Society - - - -
Nelson Building Society 5.70 4.25 4.15 -
Pepper Money Near Prime 5.64 - 5.44 5.44
Lender Flt 1yr 2yr 3yr
Pepper Money Prime 5.18 - 4.98 4.98
Pepper Money Specialist 7.59 - 7.39 7.39
Resimac 4.50 4.86 3.89 3.94
RESIMAC Special - - - -
SBS Bank 5.29 4.85 5.05 5.49
SBS Bank Special - ▼3.55 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 4.35 4.25 4.69
Lender Flt 1yr 2yr 3yr
TSB Special 5.29 3.55 3.45 3.89
Wairarapa Building Society 5.70 4.85 4.99 -
Westpac 5.34 4.15 4.09 4.49
Westpac - Offset 5.34 - - -
Westpac Special - 3.55 3.45 3.99
Median 5.34 4.04 4.09 4.39

Last updated: 15 November 2019 4:16pm

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