Default KiwiSaver provider Mercer is says there needs to be an improvement in disclosure requirements with KiwiSaver.
Head of Mercer New Zealand Martin Lewington says the requirement thresholds default schemes have should be across the industry.
He believes what happened with Huljich Wealth Management and its KiwiSaver funds was inevitable and that it has bought the urgency and timeliness of KiwiSaver issues forward.
“The Capital Markets Development Taskforce drew attention to the problem of disclosure and Huljich brought that forward.
“No-one anticipated for KiwiSaver to be so popular and as a result more rigorous and comprehensive requirements are needed across all providers.”
Mercer yesterday released its latest KiwiSaver sentiment survey.
It says that of those New Zealanders who have not joined KiwiSaver, one in four anticipates they will do so in the next 12 months compared to one in seven in 2007. For those still unlikely to join a scheme, lack of affordability was the most common reason.
Other key findings of the study include:
- Kiwis are reasonably satisfied with KiwiSaver providers; nearly half (49%) said they were either satisfied or very satisfied with their current provider.
- Respondents indicated a strong loyalty to current schemes; very few (5%) anticipated a change in their KiwiSaver provider in 12 months time.
- The main concern Kiwis have about KiwiSaver is the lack of guarantee and specific concern about the future viability of the scheme. Other concerns centered on a lack of understanding of the scheme, poor returns and a preference for greater control over personal finances.
- Kiwis predict they will need between $2,000-$3,000 per month (including NZ Super and after tax) in retirement.
- The introduction of a 2% contribution level has proven popular; 29% indicated they either plan to make or already make contributions at the 2% level (the proportion of these as a result of default selection is not known), while 46% plan to do so at the 4% level.
- Just over half (55%) actively chose their own provider, while two in five (42%) either let the Inland Revenue Department or their employer make the decision on their behalf.
- Kiwis demonstrated a reasonable level of knowledge of the KiwiSaver scheme, however respondents showed uncertainty around government fee subsidies and some believed that respondents could belong to more than one KiwiSaver fund.