The FMA says KiwiSaver providers should be disclosing fees using the investor’s balance at the date the units of the fund are valued, or the cents per unit (CPU) method.
Providers are now required to report to clients on the fees they pay in dollars, not just percentage terms.
The FMA had initially suggested the calculation could be based on the investor’s average balance or the total annual fund charge (TAFC) method. This was to enable the introduction of fees in dollar values for individual KiwiSaver annual statements by March 2018.
However, some market participants responded to the consultation and said they wanted to use the investor’s balance at the date the units of the funds are valued (CPU). This is a more accurate method, but can be more complicated to achieve.
The FMA said it would adopt CPU as its preferred method but would also allow calculation of the dollar value using the TAFC method. KiwiSaver providers were also strongly encouraged to disclose total fees as a percentage of the KiwiSaver members balance as well as fees in dollar terms.
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