The nonprofit KiwiSaver provider says that from today all of its members will no longer pay membership fees on any Simplicity funds.
Previously, adult members paid a $20 a year membership fee.
Managing director Sam Stubbs has been scathing in his criticism of industry fees, which he says remain far too high.
Over the past five years, the nonprofit has reduced its membership fee four times, including this recent move.
In contrast, the latest Morningstar KiwiSaver survey shows a median annual membership fee of $23 for growth and balanced funds and $9 for conservative funds.
Simplicity’s management fee remains in place at 0.31% per annum for all of its growth, balanced and conservative KiwiSaver and investment funds and 0.10% per annum for New Zealand share and bond funds.
The latest Morningstar survey shows mean management fee charges of 1.18% for KiwiSaver growth funds, 1.03% for balanced funds, and 0.68% for conservative funds.
Stubbs says KiwiSaver fees in 2020 were $650 million, a massive number given there are no capital requirements or any need for additional bank branches.
"Average management fees for KiwiSaver funds are two to four times higher than a not-for-profit provider like Simplicity.
"It’s party time for banks and fund managers, but a rip off for hard working New Zealanders."
He says 2021 has been a banner year for Simplicity, with fast growth, becoming a default KiwiSaver provider and winning some key customer satisfaction awards.
Simplicity has over $4 billion of funds under management and over 76,000 members in its KiwiSaver and investment funds.
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