Schemes double as KiwiSaver kicks off

As the first trickle of retirement savings money winds its way into New Zealand’s pseudo-compulsory superannuation system, 32 KiwiSaver schemes have been registered to accept the flows.

KiwiSaver went live on July 1 with new employees on that date automatically enrolled in a scheme. Many existing employees were also expected to opt in to the system for the start date. The number of registered KiwiSaver schemes has swelled from 14 two weeks ago to the current 32 and more are expected to launch products over the coming months. While the list of KiwiSaver providers includes the usual suspects, such as all of New Zealand’s major banks and asset consultants like Mercer, there are also some surprise candidates. For example, the country’s waterfront industry has launched a scheme as well as corporate funds including Douglas Pharmaceuticals and Tait Electronics. Under the KiwiSaver rules, individuals will be able to transfer to any other registered scheme whenever they choose. According to Vance Arkinstall, head of the Investment Savings and Insurance Association (the equivalent of IFSA in Australia), public interest in KiwiSaver has been high. “Following the Budget announcements providing a tax credit of up to $20 per week and the phased in compulsory employer contributions from April 1 next year, KiwiSaver has become a compelling opportunity for retirement savings. This surge in interest is no surprise,” Arkinstall said in a statement. “Approved KiwiSaver product providers are well prepared for this wave of interest and the solid stream of applications that are being received. We expect further KiwiSaver product providers to be approved over the coming weeks and months. We anticipate further new entrants to the market as the success of KiwiSaver grows.”