Kiwibank kickstarts KiwiSaver

Kiwibank has registered its KiwiSaver scheme with the office of the Government Actuary (GA), joining Milford as the second new provider to enter the fray this year.

The scheme was registered on May 5, just days after the Asteron KiwiSaver scheme closed its doors.

While further details of the new scheme are yet to be released, it is understood AMP Capital would provide most of the funds management services with the exception of the cash portfolios, which would be run by Kiwibank itself.

Last year KiwiBank ended its relationship with the Mercer KiwiSaver scheme after signing up as its distribution partner early in 2007.

It is understood KiwiBank attracted somewhere between 5,000-10,000 members on behalf of the Mercer KiwiSaver scheme.

KiwiBank was unable to comment, however, its KiwiSaver prospectus is due to be published this week.

Both Kiwibank and Milford entered the KiwiSaver market this year despite what many consider to be an over-crowded scene with 54 KiwiSaver schemes now registered with the GA, of which about 40 are open to the public – the rest either specific employer or industry-based funds.

The exit of Asteron this April from the KiwiSaver market highlighted the difficulties of growing member numbers and funds under management to a profitable size for players outside the default schemes.

Asteron, which was the third provider after Eosaver and IRIS to shut up a KiwiSaver scheme, struck a deal to recommend members transfer to the Grosvenor product.

While it was still unclear how many Asteron members had transferred to Grosvenor, the group estimated its KiwiSaver funds under management would reach $100 million by September as a result of the deal.

As at the end of March last year, Grosvenor recorded about $27 million under management and just over 14,000 members in its KiwiSaver scheme.