tmmonline.nz  |   landlords.co.nz        About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds

NZ's Financial Adviser News Centre

GR Logo
Last Article Uploaded: Tuesday, March 19th, 6:25PM

Investments

rss
Latest Headlines

Financial advisers want KiwiSaver to get SMarT

A group of four financial advice businesses wants the Government to consider implementing behavioural finance techniques to boost KiwiSaver returns.

Wednesday, August 28th 2019, 6:00AM 2 Comments

Jonathan Parsons, of Spratt Financial, Ali Bazzaz, of One50 Group, Joseph Darby, of Milestone Direct and Clive Fernandes of National Capital are lending their support to a Victoria University report as part of a submission to the Retirement Commissioner’s 2019 review of retirement Income Policies.

They want to make it easier to implement economist Richard Thaler’s Save More Tomorrow (SMarT) plan.

It works by getting people to commit to using their future pay rises to increase their retirement savings contributions. Contributions rise each year until they reach a pre-determined maximum savings rate.

The usefulness of this approach is also being considered in Massey University research.

The report asks the Government to make changes to the KiwiSaver KS2 form to allow employees to indicate how much they want their contributions to increase each year, and to what maximum. It also asks the Government to research how the plan would work in a New Zealand context by running a trial in the public sector.

The researchers noted in their report that at the moment, employees should be able to commit to future savings increases but it would require extra administrative effort.

Fernandes said the SMarT plan had been estimated to increase annual savings in the United States by US$7.4 billion ($11.6 billion).

He said New Zealand was a few years behind some of the rest of the world in implementing behavioural finance techniques. “We will get there, it’s just a question of when. I think it would make a huge difference to KiwiSaver.”

He said it was important that employers, who would have a significant role to play in implementing the system, could see that it would benefit their employees.

Tags: KiwiSaver

« KiwiSaver providers question loss-making assumptionsWhich KiwiSaver funds will weather the currency war? »

Special Offers

Comments from our readers

On 28 August 2019 at 9:04 am smitty said:
All for encouragement to put the pay rises to KS, or to perhaps, your mortgage. It doesn't acknowledge one important factor though. Incomes Vs expenses are being squeezed every year, and if someone is looking forward to an extra $30 in their pay packet every year, it will be a hard sell to save this in a locked away KS scheme to 65. Just saying.
On 28 August 2019 at 1:54 pm Clive.Fernandes said:
I believe just telling Kiwis they need to save more is not enough. The government
needs to encourage behavioural nudges which have shown to help people save
more, almost unconsciously.

The link to the full working paper can be found here - http://researcharchive.vuw.ac.nz/handle/10063/8245

Sign In to add your comment

 

print

Printable version  

print

Email to a friend
News Bites
Latest Comments
Subscribe Now

News and information about KiwiSaver

Previous News
Most Commented On
Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA - Back My Build 6.19 - - -
AIA - Go Home Loans 8.74 7.24 6.79 6.65
ANZ 8.64 7.84 7.39 7.25
ANZ Blueprint to Build 7.39 - - -
ANZ Good Energy - - - 1.00
ANZ Special - 7.24 6.79 6.65
ASB Bank 8.64 7.24 6.79 6.65
ASB Better Homes Top Up - - - 1.00
Avanti Finance 9.15 - - -
Basecorp Finance 9.60 - - -
Bluestone 9.24 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Classic - 7.24 6.79 6.65
BNZ - Green Home Loan top-ups - - - 1.00
BNZ - Mortgage One 8.69 - - -
BNZ - Rapid Repay 8.69 - - -
BNZ - Std, FlyBuys 8.69 7.84 7.39 7.25
BNZ - TotalMoney 8.69 - - -
CFML Loans 9.45 - - -
China Construction Bank - 7.09 6.75 6.49
China Construction Bank Special - - - -
Co-operative Bank - First Home Special - 7.04 - -
Co-operative Bank - Owner Occ 8.40 7.24 ▼6.79 ▼6.65
Lender Flt 1yr 2yr 3yr
Co-operative Bank - Standard 8.40 7.74 ▼7.29 ▼7.15
Credit Union Auckland 7.70 - - -
First Credit Union Special - 7.45 7.35 -
First Credit Union Standard 8.50 7.99 7.85 -
Heartland Bank - Online 7.99 6.69 6.45 6.19
Heartland Bank - Reverse Mortgage - - - -
Heretaunga Building Society 8.90 7.60 7.40 -
HSBC Premier 8.59 - - -
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 7.85 7.05 ▼6.75 6.59
Lender Flt 1yr 2yr 3yr
Kainga Ora 8.64 7.79 ▼7.39 ▼7.25
Kainga Ora - First Home Buyer Special - - - -
Kiwibank 8.50 8.25 7.79 7.55
Kiwibank - Offset 8.50 - - -
Kiwibank Special - 7.25 6.79 6.65
Liberty 8.59 8.69 8.79 8.94
Nelson Building Society 9.00 7.75 7.35 -
Pepper Money Advantage 10.49 - - -
Pepper Money Easy 8.69 - - -
Pepper Money Essential 8.29 - - -
Resimac - LVR < 80% 8.84 8.30 7.89 7.69
Lender Flt 1yr 2yr 3yr
Resimac - LVR < 90% 9.84 9.30 8.89 8.69
Resimac - Specialist Clear (Alt Doc) - - 8.99 -
Resimac - Specialist Clear (Full Doc) - - 9.49 -
SBS Bank 8.74 7.84 7.45 7.25
SBS Bank Special - 7.24 6.85 6.65
SBS Construction lending for FHB - - - -
SBS FirstHome Combo 6.19 6.74 - -
SBS FirstHome Combo - - - -
SBS Unwind reverse equity 9.95 - - -
Select Home Loans 9.24 - - -
TSB Bank 9.44 8.04 7.55 7.45
Lender Flt 1yr 2yr 3yr
TSB Special 8.64 7.24 6.75 6.65
Unity 8.64 6.99 ▼6.79 -
Unity First Home Buyer special - - 6.45 -
Wairarapa Building Society 8.60 7.15 6.85 -
Westpac 8.64 7.89 7.49 7.25
Westpac Choices Everyday 8.74 - - -
Westpac Offset 8.64 - - -
Westpac Special - 7.29 6.89 6.65
Median 8.64 7.29 7.32 6.65

Last updated: 14 March 2024 9:32am

About Us  |  Advertise  |  Contact Us  |  Terms & Conditions  |  Privacy Policy  |  RSS Feeds  |  Letters  |  Archive  |  Toolbox  |  Disclaimer
 
Site by Web Developer and eyelovedesign.com