KEY POINTS:
ASB chief executive Hugh Burrett answers questions about KiwiSaver and being one of its "default providers".
What is the role of a default provider?
If neither you nor your employer chooses a KiwiSaver scheme, the Government will allocate you to one of the default schemes. There are six providers appointed by the Government to offer these. They are ASB Group Investments, AMP Services (NZ), ING (NZ), Mercer Human Resource Consulting, National Mutual Corporate Superannuation Services (trading as AXA New Zealand), and Tower Employee Benefits. They are required to meet stringent criteria to ensure they are able to offer the kinds of retirement savings options New Zealanders want and need. The unique feature of KiwiSaver is you can keep saving through your entire working life, building a nest egg for your retirement.
How did you get the job of being a default provider?
The selection of the companies was an open tender process where Government ministers were assisted by advice from external experts who carried out detailed evaluations. The ASB KiwiSaver scheme is provided by ASB Group Investments. We have significant experience managing workplace superannuation schemes and manage more than $5.5 billion in total investments on behalf of 400,000 New Zealanders.
How are the ASB KiwiSaver Scheme funds managed?
They are principally indexed, which are sometimes called passive funds. This means the funds follow an investment style which aims to track the return of the market that they invest in. For example, investments in NZ shares will track the NZX 50 Index, which encompasses NZ's 50 largest listed companies. Index tracking funds usually have much lower investment management fees than funds using other investment styles.
What kind of fees will have to be paid?
These will be set out in the investment statement. The Government will make an annual fee subsidy of $40 to a provider.
Can I withdraw my savings from a KiwiSaver scheme?
Savings are locked in until the age of eligibility for NZ Superannuation (65), or for five years after joining, whichever is later. Withdrawing funds is only allowed in limited circumstances such as permanent emigration or significant financial hardship.
My account might get randomly allocated to your bank. Can I move it somewhere else?
Yes, at this time there have been no restrictions placed on transferring between schemes.
Is the money likely to be invested in NZ? Offshore, bonds or stocks?
ASB's default scheme is a conservative fund, which is a mix of all of these. It is made up of NZ and international bonds, international shares and cash.
How safe will my money be in a scheme?
The Government will not guarantee any individual scheme. However, KiwiSaver schemes will be run by trust deeds and regulated in a similar way to registered superannuation schemes. All schemes will need to be approved by the Government Actuary and will be regulated consistently with other superannuation products.
Will holders be told how their investment is going?
Default providers are required to provide annual members statements. However members of the ASB KiwiSaver Scheme will be able to view their investment funds online as well.
