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Cutting through the KiwiSaver confusion

March 7, 2018

Nathan Barker | Editor

Written by Nathan Barker | Editor

Bringing you all the latest news, views and up-to-date info on KiwiSaver, retirement planning, finance and more.

KiwiSaver is designed to be a hassle-free way of saving for your retirement, but are you being given the information you need to make smart decisions about your investment? Here’s why Kiwi Wealth believes members have a right to know exactly what’s happening to their money.

“Never invest in a business you cannot understand,” says Warren Buffet, one of world’s most well known investors.

While his advice isn’t fool proof – Buffet has said he regrets that his lack of knowledge of the tech sector put him off buying shares in lucrative companies such as Google and Amazon – many commentators agree that only investing in what we know is one way to reduce risk.

For most of us, the hard-earned money we’ve contributed to our KiwiSaver account is an essential part of our retirement plan. But how well do we understand it?

Calls for transparency 

In one example of KiwiSaver confusion, a 2017 Inland Revenue survey [1] of 1800 people found that almost half of KiwiSaver members had never heard of one of the scheme’s main benefits: the member tax credit paid by the government. 

Some of those who knew about member tax credits thought they hadn’t received any money, even though they had. Others thought they’d received the maximum amount of $521.43, even though they hadn’t. 

David Boyle, from the Commission for Financial Capability [2], believes more should be done to ensure KiwiSaver investors have the facts they need to make better-informed decisions about their long-term financial planning. 

It’s a call also made by Paul Gregory, from the Financial Markets Authority.

“As KiwiSaver matures, balances are increasing and more people are looking at what’s inside their KiwiSaver account. This will increase demands for transparency,” he said [3].

So how can you be sure you have the information you need to get the best out of your KiwiSaver account?

Here at Kiwi Wealth, transparency has always been one of our guiding principles. Here’s how we do it.

Investments at a glance

We believe Kiwi Wealth KiwiSaver Scheme members have a right to be able to find out exactly what’s happening to their money at any given time.

If you’re a member, you can login to your secure member area any time to find out:

  • Every cent that’s going into your account each day, and when and where it came from.
  • Every stock your money is invested in, and how much money is in each one, valued every month.
  • How much we charge in fees for managing your money each month.
  • How much tax you’re being charged each month.
  • How your investments are performing each month.
  • Your weekly account balance.
Taking control of your investments

Our commitment to transparency, was one reason for creating Future You* our online retirement planning tool, which means we not only allow you to see where you stand today, but help you understand what you might need to afford the retirement lifestyle you want - and see how your KiwiSaver investment could help you afford that lifestyle.

Workplace Savings NZ gave Future You its ‘Best Overall KiwiSaver Member Experience Award’ in 2017, saying it raised the bar for how a provider could communicate with its members.

Why is communication and transparency so important to us? Because we know money can be stressful if you don’t feel in control of it.

Responsible investing

Another important part of understanding your KiwiSaver account is having the peace of mind of knowing your investments align with your values.

None of Kiwi Wealth’s investment funds have holdings in tobacco or controversial weapons companies, directly or indirectly. We also exclude companies based on their behaviour and their impact on people and the environment.

All Kiwi Wealth KiwiSaver Scheme investment funds are certified by the Responsible Investment Association Australasia (RIAA)^, which represents responsible and ethical investors across Australia and New Zealand.

[1] Commission for Financial Capability. (2017). Confusion reigns on Member Tax Credits. Retrieved from: https://www.cffc.org.nz/latest-news/financial-literacy/confusion-reigns-on-member-tax-credits/

[2] Commission for Financial Capability. (2016). December review news: KiwiSaver hits and myths. Retrieved from: https://www.cffc.org.nz/reviewretirementincomepolicy/December/kiwisaver-hits-and-myths

[3] Financial Markets Authority. (2017). FMA releases KiwiSaver tracker. Retrieved from: https://fma.govt.nz/news-and-resources/media-releases/fma-releases-kiwisaver-tracker/

* The Future You tool is available to members who are aged between 18-65 and who have not made a transfer from an Australian complying superannuation fund.

^ The investment funds in the Kiwi Wealth KiwiSaver Scheme have been certified by RIAA according to the strict operational and disclosure practices required under the Responsible Investment Certification Program. See www.responsibleinvestment.org for details.  The Responsible Investment Certification Program does not constitute financial product advice. Neither the Certification Symbol nor RIAA recommends to any person that any financial product is a suitable investment or that returns are guaranteed. Appropriate professional advice should be sought prior to making an investment decision. RIAA does not hold an Australian Financial Services Licence.

The information provided, or any opinions expressed in this article, are of a general nature only and should not be construed, or relied on, as a recommendation to invest in a particular financial product or class of financial products. You should seek financial advice specific to your circumstances from an Authorised Financial Adviser before making any investment decisions.

Tags: KiwiSaver, Retirement

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