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

Gaza.Scoop: UNRWA School, Ambulances Attacked - Gaza MOH

The Ministry of Health Gaza expresses its horror and outrage at the latest Israeli massacre moments ago at an UNRWA school sheltering displaced persons in Beit Hanoun. Ten people have been killed and there is a large number of wounded. More>>

ALSO:

Gordon Campbell:
On Gaza And Burning The Israeli Flag

One of the selling points in New Zealand’s campaign for a temporary seat on the Security Council is that we have a pluckily independent voice to offer on international conflicts.

This image is not entirely self-delusional. When we did occupy a temporary UN Security Council seat in the 1990s, New Zealand was forthright about the need for the international community to actively respond to the Rwanda genocide. On April 14, 1994, New Zealand, Nigeria and the Czech Republic were the only nations to call for a forceful UN intervention to halt the killings. It was a proud moment in the diplomatic record of the Bolger government.

What then, is the current National government doing with respect to the slaughter in Gaza? More>>

 

Parliament Today:

Minister Told Of FBI Investigation, Says INZ: Coleman Must Quit Or Be Sacked Over Dotcom Case - Harré

Immigration New Zealand has done the right thing in distancing itself from Jonathan Coleman’s claims that ministers were not aware of FBI involvement in Kim Dotcom’s residency application, says the Internet Party. More>>

ALSO:

Valedictory Season: Maori Party Founders Say Goodbye

Two major Maori MPs gave there farewell speeches to Parliament Thursday outlining their history, experiences, triumphs and regrets. More>>

ALSO:

Resignation Not Accepted: Transport Minister Breaches Aviation Security Rules

"Running late for a plane at Christchurch Airport, I without thought breached airport and airline security rules by entering the gate lounge through a door usually used for exit only..." More>>

ALSO:

TAIC Report: Urgent Recommendations After Melling Rail Accident

The Transport Accident Investigation Commission has made four urgent recommendations to KiwiRail following the accident two months ago (27 May) when a Matangi passenger train collided with a stop block at Melling Station, Lower Hutt. More>>

ALSO:

Red Tape: Local Regulations Go Under Microscope

The Government says it is accepting nearly all of the recommendations the Productivity Commission has made on ways to improve local regulations. More>>

ALSO:

Spending Questions: Claudette Hauiti To Step Aside At Election

National Party President Peter Goodfellow confirms that he has received notification from List MP Claudette Hauiti that she plans to step aside at the 20 September election. More>>

ALSO:

EPA: Board Of Inquiry Rejects Basin Flyover By Majority Of 3 To 1

The independent Board of Inquiry delegated to decide on the Basin Bridge Proposal has, by a majority decision (3 to 1), cancelled the Transport Agency’s Notice of Requirement and declined its resource consent applications for the construction, operation and maintenance of a flyover on State Highway 1 in Wellington City... More>>

ALSO:

Get More From Scoop

 

LATEST HEADLINES

 
 
 
 
 
 
Politics
Search Scoop  
 
 
Powered by Vodafone
NZ independent news