National floats allowing KiwiSaver splitting

The National Party says if it is elected it will allow KiwiSaver members to split their savings amongst multiple providers.

National has proposed allowing KiwiSaver members to split their savings between multiple schemes.

National’s Commerce and Consumer Affairs spokesperson Andrew Bayly says the move will drive innovation, boost competition and putting downward pressure on fees.

“The money in every KiwiSaver account belongs to the person who saved it – but the current rules mean Kiwis have to have all their KiwiSaver savings with just one provider.

“That restriction is limiting investment choices, and potential returns, for savers.

“As the sector grows and matures, some KiwiSaver providers are looking to diversify their investments into different classes of assets – such as start-ups and Build-to-Rent investments. However, under the current settings, savers who want to access these new investments are forced to shift all their savings to that provider – limiting choice and competition.

“KiwiSaver plays an increasingly important role in the New Zealand investment environment, as generations of savers continue to accumulate assets. But restrictions on savers and fund managers are pushing up fees and limiting investment opportunities.

“Increasing flexibility and choice for KiwiSavers to allocate their savings across multiple providers will encourage innovation, and higher potential returns over their lifetime.

“That’s why National will give KiwiSavers the flexibility to split their savings across multiple providers to provide more choice, improve investment options and competition. Improving competition is the best way to put downward pressure on KiwiSaver fees.

National also plans to roll back the Credit Contracts and Consumer Finance Act (CCCFA) and it will repeal the recent Conduct of Financial Institutions Act (CoFI).

It says CCCFA imposes additional burdens on lenders, making credit more expensive and harder to obtain, even for basic services such as overdrafts and mortgages.