The New Zealand government’s review of the KiwiSaver super scheme has resulted in the number of KiwiSaver default providers dropping from nine to six from the end of this year, with some large bank providers amongst the losers.
AMP, ASB and ANZ are no longer on the list of funds that can be allocated to scheme members who make no active decision about a provider when starting a new job.
The review will also result in changes to settings of the default funds to maximise member returns, and new responsible investment obligations.
Around 381,000 KiwiSaver members are currently in the default fund they were automatically allocated to when they started a new job, because they did not make any active decisions about their fund.
The new default provider arrangements, which will take effect once the terms of the current providers ends on 30 November 2021, mean those joining the scheme at 18 could have an extra NZ$143,000 at retirement through lower fees and higher investment returns, the government said.
The current default providers are AMP, ANZ, ASB, BNZ, BT Funds (Westpac), Fisher Funds, Booster, Kiwi Wealth (Kiwibank) and Mercer.
From November 30, they will be replaced by BNZ, Booster, BT Funds Management (Westpac), Kiwi Wealth, Simplicity and NZX’s Smartshares.
Commerce and Consumer Affairs Minister David Clark said when the government went to tender last October it signalled default providers would need to demonstrate they would go further to deliver more for default members.
“The six default providers were selected because they offer the best value for money for their members in terms of lower fees and higher levels of service,” Clark said.
ANZ spokesman Stefan Herrick said: “While we’re disappointed we haven’t been appointed a default provider, we’re looking forward to continuing to make KiwiSaver a success and helping New Zealanders prepare for a more secure financial future.”
Last month the head of ANZ's KiwiSaver business, Craig Mulholland, announced he was leaving the business.
AMP Wealth Management, which recently announced its investment stance would switch from active management to passive, said in a statement it remained committed to KiwiSaver.
"We deeply value our default KiwiSaver clients, our current default portfolio represents less than 7 per cent of our total assets under management and around 3.5 per cent of total revenue so this decision doesn’t have a major impact on our business or our commitment to KiwiSaver," said AMP Wealth Management chief executive Blair Vernon.