Gordon Campbell | Parliament TV | Parliament Today | News Video | Crime | Employers | Housing | Immigration | Legal | Local Govt. | Maori | Welfare | Unions | Youth | Search

 


Thin Gravy in the KiwiSaver Fee Train

October 20 2013

Thin Gravy in the KiwiSaver Fee Train

The Financial Services Council, which represents leading financial and insurance institutions, says Winston Peter’s swipe at fees for managing KiwiSaver funds was way off the mark.

“Current fees for KiwiSaver have been certified as not unreasonable by the Government Actuary and in future by the FMA,” FSC CEO, Peter Neilson said. “People who are unhappy with KiwiSaver management fees have a wide choice of over 20 providers who compete vigorously for the business and there will be further scrutiny with fee levels included in the Government’s tender criteria for selecting KiwiSaver default fund providers for the next seven years.”

Fees are lower than in Australia and are likely to decrease as account balances and Funds Under Management grow,” Mr Neilson said, commenting on the New Zealand First leader’s claims that “private funds managers were sucking the lifeblood out of KiwiSaver”.

“About 2 million people are enrolled in KiwiSaver, but the average KiwiSaver balance is only around $8,000 which means there are no economies of scale yet to be realised, and like a bank account, it costs as much to manage an $800 account as it does an $8,000 account,” he said.

Mr Neilson said that the recent low prices paid for KiwiSaver funds management companies indicated that this was not yet a lucrative area of business because of a high account volumes but low balances.

“The number one issue affecting KiwiSavers in getting to a comfortable retirement is the harsh tax regime which favours property investment over savings, followed by the type of funds portfolio chosen. Fees are a very distant third.”

The FSC has recently released a plan of options for consideration by politicians as the basis for a new cross party agreement on retirement incomes that seeks to enable New Zealanders to retire on double NZ Super – the annual income consumers told independent researchers they needed.

How to double retirement incomes
•  keep NZ Super and the link to wages as is
•  gradually increase Kiwi Saver contributions by 1% p.a. to 7%
•  move default KiwiSavings into higher earning, life stage appropriate funds
•  offset additional risk with insurance or a capital guarantee
•  level the tax playing field for KiwiSaver funds, paid for by re-targeting KiwiSaver incentives to fund lower tax rates

ENDS

© Scoop Media

 
 
 
 
 
Parliament Headlines | Politics Headlines | Regional Headlines

Syriza Win Greek Election: The Rumblings Of The Left

Binoy Kampmark: The left – and by this, the genuine, progressive, unmanagerial left – is getting noisy. The Greek elections are upon us, with the similar challenges being played out from 2012. There are fears of Grexit – a heavy breathing departure from the eurozone that will do everything to rattle the central currency mechanism that has been taking a battering...

Much of this has been triggered by the moral outrage and political response of the left grouping centred on Syriza of Greece. The movement has been said to have similarities to a new constellation of power in Spain, led by Podemos. Syriza, led by Alexis Tsipras, has promised to renegotiate the terms of Greece’s 240 billion euro international bailout arrangements. Both parties point out to the distance between elector and the elected, a creeping death of democratic accountability in favour of market propriety. More>>

 

Transport: Auckland Looks To Light Rail

The Board of Auckland Transport has called for an investigation into a light rail network, which could relieve traffic congestion on some of the region’s busiest roads. This stems from work in 2012 (the City Centre Future Access study) which responded to a government request to develop a robust and achievable solution for access to the CBD. More>>

ALSO:

RMA: Smith's Claims Don't Match Evidence - Greens

The Motu group’s research into the impacts of planning rules looked at the costs related to housing development but not the benefits of environmental protections and does not recommend significant changes to the RMA to reduce the cost of new house builds. More>>

ALSO:

Gordon Campbell: On The Similarities Between John Key And David Cameron

For years now, David Cameron has been the closest available thing to a mentor/analogue to our Prime Minister, such that Key watchers could be interested in an analysis of Cameron that appeared in the British press over the Christmas break. More>>

Gordon Campbell: On Ian Fletcher Resignation & GCSB’s New Role

It may well be that after being shoulder-tapped in Queensland for the GCSB job, three years of living in Wellington has been enough for Fletcher and his family, given that the pending review of the GCSB would have required an even longer commitment from him. Three years of Wellington’s weather is enough for anyone... More>>

ALSO:

Ian Apperley: $10m Or $100m For New Wellington Council IT System?

I feel a Tui Billboard coming on. I commented the other day that it looked like the Council’s Ninth big project was a potential $100 million plus... The Mayor has responded: “I am reassured by the Chief Executive and by Anthony Wilson that the proposed budget is in the region of $10 million.” More>>

ALSO:

Southern Ocean:
Navy Intercepts Illegal Fishing Vessels

Foreign Minister Murray McCully today put illegal fishing vessels operating in the Southern Ocean on notice and vowed to take action against their owners. “As part of a multi-agency operation, the HMNZS WELLINGTON has intercepted two vessels claiming to be flagged to Equatorial Guinea, fishing illegally in the Southern Ocean.” Mr McCully says. More>>

ALSO:

Get More From Scoop

 

LATEST HEADLINES

 
 
 
 
 
 
 
 
Politics
Search Scoop  
 
 
Powered by Vodafone
NZ independent news