ANZ says KiwiSaver enrolments slump

ANZ New Zealand, which is New Zealand's biggest manager of KiwiSaver funds with over NZ$4.2 billion of funds under management, said new enrolments have more than halved since the Government slashed a subsidy for the pension scheme in May.

New Zealand's big four Australian-owned banks have built up over NZ$13 billion in funds under management in KiwiSaver funds since its launch eight years ago and it is becoming a lucrative revenue source.  Almost 2.5 million - or 56 per cent - of New Zealanders have over NZ$28 billion invested in KiwiSaver, an 'opt out' pension scheme where the Government contributes NZ$521 a year per active saver. Enrolments and contributions are managed by the Inland Revenue Department.

The Government cancelled a NZ$1,000 grant for each new account in its May Budget and Prime Minister John Key argued then that the removal of the 'kick start' would "not make a blind bit of difference to the number of people who join KiwiSaver."

But ANZ said new enrolments to its scheme had dropped by more than 50 per cent since the Government announced the immediate end of the 'kick-start' on May 21. ANZ did not specify the number of new enrolments in May. IRD reported an average of 15,750 new enrolments per month in the first five months of 2015.
 
ANZ NZ's managing director of wealth, John Body, said the removal of kick-start had hit confidence in the scheme and he called on the Government to telegraph future changes.

He said an ANZ survey in early June of 1,200 people who had yet to join KiwiSaver found 62 per cent said they were now less likely to join the scheme because the 'kick-start' had been scrapped.

Also, 40 per cent of those surveyed were less confident about the scheme's future with 52 per cent of those surveyed also saying they expected further changes.

"We need a no-surprises approach here so people don't lose confidence in KiwiSaver because it's important to the whole country that New Zealanders save for their retirements," Body said.