KiwiSaver

Prime Minister John Key has dismissed comments from Standard & Poor’s analyst Kyran Curry that changes to KiwiSaver will increase national debt levels.

Speaking to Radio New Zealand, Curry said that while Government spending did need to be brought under control it should not be at the expense of household savings.

His comments came after Key delivered a pre-Budget speech last week signalling cuts to the KiwiSaver Members Tax Credit.

“I mean Kyran Curry is a bright boy so I’m sure he can work out that if the Government actually stops to save and the private sector starts saving that increases national savings,” Key said.

He said the government intended to get savers making larger contributions themselves.

Finance Minister Bill English also defended plans to change KiwiSaver.

“The fact is KiwiSaver was put together at a time when the Government had very large surpluses, now it doesn’t have large surpluses,” he said.

“New Zealanders have realised that too much debt is not a good thing. That more savings gives them a greater sense of security. KiwiSaver is one vehicle for that.”

Labour leader Phil Goff said he was concerned the ratings agency had apparently voiced doubts over the changes.

“I’m really worried when Standard & Poor’s comes out this morning and says that the changes to KiwiSaver will discourage savings, we’re trying to do the opposite.”

“What KiwiSavers out there feel is that the contract with them has been broken, and it’s been broken unilaterally by Government alone, and that discourages confidence among potential KiwiSavers,” he said.

“Why would they go into a scheme if the government changed its mind every second day and changed the conditions in a scheme that they will effectively be locked into?”

KiwiSaver is the third most popular investment class in the country, with 12% of New Zealanders believing it offers the best rate of return, according to the latest ASB Investor Confidence Survey.

KiwiSaver came in at joint third with bank savings accounts, behind term deposits in first place with 19% and rental property at 15%.

“Over the past year KiwiSaver has climbed from last place to third equal in return perceptions, the highest level yet,” said ASB head of Private Banking and Wealth Management Jonathan Beale. <

“Those expecting KiwiSaver to be their main source of retirement funding also reached a new high of 62% (up from 61% in Q4 2010), while respondents currently using KiwiSaver climbed 5% to 43% – another high.”

“After almost four years of contribution from individuals, employers and the Government, investors are starting to sit up and take notice of KiwiSaver. Fund balances are growing, and the KiwiSaver scheme has proven to be a successful way of turning around the poor savings habit of many New Zealanders.”

Beale said he believed there will be a change in investors perception of KiwiSaver in the wake of changes to be announced in this week’s Budget – which the Government has confirmed will include reductions to Member Tax Credits.

“However, we believe KiwiSaver is still likely to remain the most popular retirement savings vehicle for respondents in our survey,” he said.

OnePath has announced it has achieved two KiwiSaver milestones with over 400,000 members enrolled in its four KiwiSaver schemes and $2 billion in funds under management.

With nationwide KiwiSaver membership at 1.7 million, ANZ fund manager OnePath now leads the industry with almost one in four KiwiSaver enrolled in its schemes.

“We’re proud to have passed these significant milestones as the current membership far exceeds the original expectations when the initiative was launched nearly four years ago,” said ANZ Wealth managing director John Body.

OnePath also revealed IRD figures have shown continuing enrolment at more than 20,000 per month for the year to date.

“The continuous growth in enrolment reinforces KiwiSaver’s success in encouraging New Zealanders to start saving for their retirement. We have always advocated a consistent approach to KiwiSaver as the best way of improving New Zealand’s previously poor record of long-term retirement savings.”

Body said despite the recently announced changes to KiwiSaver the fundamental design of the scheme remains intact.

“What is most important is that we hear certainty from policy makers that KiwiSaver is here to stay, so New Zealanders can have confidence in their decision to join and save for their retirement.”

“ANZ New Zealand’s submission to the Savings Working Group recommended targeting Member Tax Credits for those on low to middle incomes and the self employed, to encourage these members to continue contributing throughout their working career. We’ll wait to see further details on the changes to Member Tax Credits in the Budget next week,” he said.

“We are at a turning point as a nation with a new era emerging focused on savings and productive investment. As a leading provider we understand there is now an opportunity to consolidate the success of KiwiSaver for the benefit of all New Zealanders and ensure the growing savings pool is put to work in building and strengthening the nation’s future economic prospects.”

Fisher Funds and Mike Pero Mortgages have announced an agreement for Mike Pero to distribute Fisher Funds KiwiSaver scheme.

“This partnership brings together two strong Kiwi brands, leveraging the strengths of each,” said Fisher Funds managing director Carmel Fisher.

“Mike Pero has a powerful distribution network throughout the country with superb client relationships and a reputation for trusted advice. The Fisher Funds KiwiSaver scheme has achieved market leading investment returns and provides an award winning communications capability. Together, we can provide Mike Pero clients with easy access to our scheme to build their retirement nest egg.”

Mike Pero Mortgages CEO Shaun Riley said he was delighted to be able to offer clients direct access to the Fisher Funds KiwiSaver scheme as part of their response to client demands for a wider range of quality financial services.

“We want to help our clients with the important decisions in their lives, whether they are buying their first home, protecting their assets or planning for their retirement,” he said.

“After an extensive research process, we felt Fisher Funds was closely aligned to the principles we consider important and offered the best fit for our client base. They are straight talking, have an excellent track record and focus on delivering the best outcomes for their clients.”

Mike Pero has 42 franchisees across the country and their brokers will begin distributing the Fisher Funds KiwiSaver next week.