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Ken and Barbie used to sell retirement message

The Commission for Financial Capability is winning industry plaudits for it's use of a digital interactive platform that uses Ken and Barbie dolls to raise awareness about New Zealand's ageing population and the need for increased saving.

Tuesday, December 13th 2016, 6:00AM 12 Comments

by Owen Poland

Rather than prepare a traditional policy document for its three yearly review of Retirement Income Policies, which Retirement Commissioner Diane Maxwell says that "nobody reads", the CFFC has used WIREWAX interactive video technology to present 'Toys Talk Retirement'.

In what's believed to be a world first for a report of this kind, the content features short stop motion animation movies supported by more than 100 pieces of content ranging from surveys and research findings to blogs, podcasts and expert opinion to support its recommendations to Government.

“We’re letting Ken and Barbie and a team of superheroes do the talking, with all the work supporting our recommendations tucked into the interactive videos that everyone can access online" says Maxwell.

It's an intentionally populist approach which Maxwell hopes will have more sway in Wellington. "You can ignore a policy geek but you cannot ignore hundreds and thousands of your voters" she says, referring to the thousands of interviews and surveys conducted up and down the country over the past seven months.

Maxwell believes that nothing will change "until we change the popular imagination", so the CFFC is targeting 30 to 55 year olds who are entering the phase where they are making decisions that impact their retirement.  And besides, she says ordinary new Zealanders don't want to hear about dependency ratios and intergenerational equity and that kind of stuff, they want to hear about what it means for them.

Simplicity KiwiSaver founder Sam Stubbs says he's "unequivocally positive" about the interactive approach because a picture paints and thousand words and "anyone providing information in video form is likely to get a much faster cut through."

And Stubbs has no problem with the use of Ken and Barbie dolls. "Effectively what it's doing is simplifying concepts, it's delivering it in a much more efficient form, and it's much more entertaining - and entertainment equals education very often."

AMP' incoming managing director, Blair Vernon, agrees that light hearted videos are a very different way to engage more New Zealanders in serious decisions that affect their retirement savings.

"We support the approach which helps to deliver content, which can sometimes be a bit dry, in a way that is more accessible. The videos will no doubt get people talking and therefore thinking more about their retirement plans, and ultimately lead them to take positive action, and that's an important goal we also share and fully support."

Use this link to find the interactive video series: http://v.wirewax.com/cffcreview2016

Tags: Commission for Financial Capability retirement

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Comments from our readers

On 13 December 2016 at 4:41 pm Brent Sheather said:
I would love to see Ken and Barbie’s faces when they get told they can’t withdraw their KiwiSaver but have to buy an annuity.
On 14 December 2016 at 9:38 am blogger billy said:
Brent is right

(goodness I am agreeing with Brent and Murray all in the same week)

Just another reason to only put the minimum into KiwiSaver

Someone else is making the rules

in return all you get is a paltry $10 pw from the govt

and the $10 pw is NOT guaranteed

it is at the whim of future politicians

Trust a govt to look after you ? Not a good idea

KiwiSaver is fine but do more and make sure it is under your control as much as is possible

Put another way, are you:

- a National voter ?

- a NZ First voter ?

- a Labour voter ?

- awake ?

On 14 December 2016 at 8:21 pm Mr Slater said:
Whilst I don't necessarily disagree that Kiwi Saver is not perfect I have yet to see any arm chair critics come up with an alternative that makes people save and prevents them from using the funds before retirement. And do not tell me people just need to be strong willed or similar. People will spend their savings if they can access them - guaranteed. Take a look at Australia to see how much retirement superannuation was spent early before manditory preservation. Or worse how much was spent on the 'big trip' (eg the caravan and 4WD around the country. before annuity tax incentives were introduced.

A very wise person once said don't criticise an idea unless you have a better solution.

So here's my challenge Brent and others - tell us your better solution to our retirement savings challenges. Beacause all I've seen is attacks on Kiwi Saver without options that Mr and Mrs Barbie can understand and that can provide some form of guaranteed asset and income at retirement.
On 15 December 2016 at 9:46 am John Milner said:
I haven't personally helped a single client into KiwiSaver as that's outside my client profile but I think Blogger Billy is a little lite on the KiwiSaver benefits i.e. employer contribution matching dollar for dollar of the employees contribution up to 3%.

That's 100% return on your investment Blogger Billy before the albeit small token gesture from the government and whatever the fund manager can deliver. Small compared to other counties like Australia but they're a few years ahead of us. I think taking full advantage of the benefits of the 3% is well worth it. Even with the possible future restrictions of redemption.
On 16 December 2016 at 8:43 am Brent Sheather said:
Hi Mr Slater. That’s an easy one – all I suggest is that fund managers and the government acknowledge that its Ken and Barbie’s money and they can do with it what they want. If, when they retire, they choose to buy an annuity that’s fine, but if they don’t that’s fine too.

As you know the UK tried compulsory annuitisation and that caused huge public backlash and was eventually abolished.

It also was an implicit subsidy to annuity providers and a disincentive to competition. We don’t want to make the same mistake here. The fact that it would be a mistake is obvious because the local banks think it is a good idea but they are being very careful not to say too much publicly.

One or two times when they have come out publicly and I quoted them they were very angry! There are a few other tweaks that would make KiwiSaver better – obviously lower fees, proper disclosure of fees and the ability to diversify over managers to name a few obvious ones.

Hope this helps.

Regards
Brent Sheather
On 16 December 2016 at 10:17 am blogger billy said:
How many employers generously contribute 3% or 4% over and above the employee’s salary?

My guess is not many. Its usually a pay cut/ salary deduction.

KiwiSaver is fully taxed - - contributions are made with after tax income and the investment earnings are taxed too.

The only tax break is the govt $10 pw and that can be chopped at any stage.

It wasn’t long ago that it was $20 but John- lost-the-key-and-the-plot cut it before the scheme was 6 years old

The govt give KiwiSavers sweet-bugger-all and still make the rules - lock in and retirement age rules.

We have far too much govt in our lives already.

Sure, use the lock in to help those who cannot help themselves (not spend the money).

But it’s kind of condescending and a nanny state approach.

But YES, I DO tell everyone to join because any saving is good saving. But only contribute the minimum they need to get the govt $10 pw.

Save elsewhere not locked in - and pay attention to emergency money

– so much advice I see ignores emergency money - an essential financial planning tool.

Your client who has a big mortgage and a big Kiwisaver won't thank you when he gets made redundant/gets ill/his business fails in a recession and he loses his house

And why don’t we get superannuation tax breaks like the Ozzie’s do? Our govt is mean spirited.


And why no self-managed options for kiwis? An Ozzie accountant told me that so many ordinary Ozzie battlers use this with a geared rental, otherwise they would never have saved any real money.

KiwiSavers is OK and any saving is good saving.

But its only OK, it isn’t great, it’s certainly not generous, and you can’t use it in emergency.

On 16 December 2016 at 11:19 am Mr Slater said:
Please let's not forget that the aim of Kiwi Saver is to provide saved funds for retirement income. Otherwise the superannuation age needs to rise or our taxes. It scares me terribly what people do when they find themselves with a lump sum of money. History shows most will spend it.

I agree it is Ken and Barbie's money but giving them incentives to use their money as an income stream by reduced tax or higher earning rates is in my view far better than giving a big pot of cash and let them do what they like with it.

Billy tell me how many people you have seen that have been able to genuinely save for their retirement and who have not touched their funds along the way.

Yep it is nanny state but by goodness in this material age we live in we need nannying on this issue.
On 16 December 2016 at 1:05 pm w k said:
@mr slater: "I have yet to see any arm chair critics come up with an alternative that makes people save and prevents them from using the funds before retirement." - you are dead wrong. that's been suggested some years back a proven method of over 40 years. the govt tossed it in the bin ... no ... in garbage tip somewhere. do you think politicians really ever bother?
On 16 December 2016 at 1:10 pm Brent Sheather said:
Hi again Mr Slater

I don’t agree with tax incentives for savings at all especially annuities because, as we have seen in Australia, the finance sector appropriates most of these gains for themselves. You should look at real life examples of annuities and calculate the IRR and you will see how bad things are. I have done this and in one case the IRR was actually less than the yield to maturity on 20 year Australian governments.

In other words if the tax incentives didn’t occur fees would be much lower. If there are tax incentives they should only apply to money invested with fund managers with fee structures under some arbitrary level like 20 basis points. Also the problem with tax incentives is that things become awfully complicated and what you gain in the tax incentives you pay in accounting fees. England and Australia are great examples of what not to do.
On 16 December 2016 at 3:20 pm blogger billy said:
Trevor, I’ve met you, you’re a good bloke, and I know you mean well, but it just ain’t that simple

For a start, would you trust a big institution with say $400,000 of your ex KiwiSaver money at age 65 to convert to an annuity and pay you to age 95 ?

In 2008 and 2009 we saw how untrustworthy the biggies are. Guaranteed to be greedy ? yes ! Good at sales presentations ? yes ! Trustworthy ? no !

So trusting the biggies with an annuity has no appeal (not to me anyway).

I am sure / have seen/ believe that there is a "good with money / good saver” gene

But only about 20% of people have it

I don’t have it, but I do know (and teach) the next best thing - cashflow is king

e.g. if you are not a good saver, preserve your cashflow somehow e.g. don’t retire early

But should it be the role of govt to protect the 80% from themselves?

And can we rely on governments to do so??

The UK govt last year (to save / generate tax ) let people access some of their super at age 55

I know, I was there, and I saw many of them in their newly acquired caravans tripping around

They say it created a mini economic boom in the UK

Fool’s boom more like - created by a foolish and short sighted government

Or a Muldoon comes along and axes the whole thing. John Keyless couldn’t leave KiwiSaver alone either and chopped the $20 pw to $10 pw

So, Trevor, you can’t rely on governments or big institutions

You could tax people more heavily and pay them a bigger national superannuation, but then a government along the way might spend it – they’ve done it before !!

My old friend Beadle liked to have “little pots of money” everywhere – cash in the bank, a balanced portfolio, a John Deere tractor and hay baler that he contracted out part time till he was 90, a couple of valuable vintage cars, some cash under the woolshed, and he fed himself partly with a Contiki fishing line and a few head of cattle. He probably had more he didn’t tell me about too.

But then he was good with money

Creative though I may be , I don’t have the answers

Does anyone? Or perhaps Beadle did.
On 17 December 2016 at 11:59 am Mr Slater said:
Gents, I don't disagree with your views and agree there is no easy answer. One thing Kiwi Saver will do is at least show folk how saving and not spending can build up a nice little pot of money (subject to not getting ripped off by fees). This should then help to create a savings mentally - hopefully!

Just one point on self managed super in Australia as Brent mentions about annuity and tax costs the same applies to self managed super. They are complicated and heavy rules apply to avoid things like buying a house and living in it. In reality SMS are only suitable for higher income earners.

As you know Aussies have full choice of funds and individual direct investments. This has also caused problems as a lack of investment knowledge has meant losses.

There is no easy answer but we all need to encourage people and especially our young folk to save.

I'm off to by my Contiki now!

Cheers
On 19 December 2016 at 7:05 am blogger billy said:
My old friend Beadle and his “little pots of money” everywhere

This debate is actually useful (for me at least)

We know governments will mess with super and KiwiSaver and make a hash of it

Muldoon, UK access at 55, John Keyless reducing the govt contribution to KiwiSaver are but a few of many pathetic examples

We also know big institutions are greedy greedy greedy and their clients do lose money e.g. ING DYF and NZ Funds Mgmt CDOs

And high fees everywhere as Brent rightly reminds us daily

So, Beadle had it right

Little pots of money everywhere

And KiwiSaver is only one of those pots. It is not the B-all and not the end-all.

A cash pot

He was too old for KiwiSaver but he had a diversified 40/60 portfolio

He used his tractor to do some contracting – I.e. working longer part time

He used his skills to rebuild a vintage car, and then he drove it to vintage car rallies – mind you he said it was so under powered it wouldn’t pull the skin off a rice pudding

He fixed up an old house on his small holding and rented it out

He kept a few sheep and cattle for a hobby and for food

Since he lived by the sea, a Contiki was a no brainer

Many of us can do something similar

Little pots, little pots, little pots
I won’t be one of the have nots
Spread it out diversify and enjoy
Lots of pots makes a happy young old boy
You don’t have to be a rocket scientist
Just add more and more pots to your list

Beadle has long since taken his little 4WD Jeep to higher places - but cheers mate – it was a privilege to know you

NB this is a lot more fun and a lot more constructive than our usual grizzly blogs about the FMA

Merry Xmas to you all

And wishing you (and me) less compliance in 2017

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