BUDGET 2012: Default KiwiSaver providers face stricter rules
Default KiwiSaver providers will be reviewed, and they will be subject to stricter reporting rules as part of changes to the scheme announced today.
Default KiwiSaver providers will be reviewed, and they will be subject to stricter reporting rules as part of changes to the scheme announced today.
There are six default providers (AMP, ASB, AXA, OnePath, Mercer and Tower), and new investors are assigned to one if they don’t actively choose a fund.
Commerce Minister Craig Foss says “reassessing the number, design and investment mandate of KiwiSaver default providers will ensure these funds are operating in the best interests of New Zealanders who haven’t actively chosen a KiwiSaver fund”.
New rules will also require default providers to provide four quarterly reports and one annual report on their performance, which will also be sent to the Financial Markets Authority.
From April 1, 2013, fund managers will have to report their performance and returns, fees and costs, assets and portfolio holdings, liquidity and liabilities, and key personnel, in a standardised format on their website.
Finance Minister Bill English says the changes mean “investors have better information to compare fund performance, so they can make informed choices about where to invest”.
The government has also announced it will hold off on introducing compulsory enrolment into KiwiSaver.
Auto enrolment was planned for 2014-15, when the government expected it would have enough spare cash to meet the forecast cost of up to $514 million over four years.
“Proceeding with auto enrolment in 2014-15 is not now possible without putting the surplus at risk,” Mr English says.
“Public consultation will now be deferred until after 2012 and the policy won’t be implemented until after 2014-15.”
The Ministry of Economic Development will issue a discussion paper on the review of KiwiSaver default providers later this year, with any changes to be implemented before June 30, 2014.
Caleb Allison
Thu, 24 May 2012
Thu, 24 May 2012
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BUDGET 2012: Default KiwiSaver providers face stricter rules
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