Was Your KiwiSaver Fund Recently Fired?

By Brendon Ojala

KiwiSaver made the news last week when the Government announced what providers made the list of default providers. Is your KiwiSaver with a provider that got fired? If you don't know, now would be a great time to review your KiwiSaver settings with an adviser from Velocity Financial.

Here is some background to the story

• The "default funds" were the nine funds that you were randomly allocated to one of if you signed up for KiwiSaver (generally when you started your first job) and you didn't select your own scheme.
• There were nine providers and you were put into a really conservative fund (meaning low growth, low volatility). These are generally considered the worst funds to be in if you don't need your funds for many years.
• The Government has been concerned how many people never reviewed these (and how bad the fund providers were at reviewing these clients to ensure they were in the right funds).
• A number of fund providers have been removed from the list (including a couple of big banks).
• The Government chose some new providers (and kept some of the old ones) who they believed would do a better job looking after their default fund members.
• The Government has changed the default fund from a conservative fund to a balanced fund (so now, even if you don't do anything at least your returns over the long run will be better than they had been).

So, what should you do?   

Short answer ...  get informed by asking yourself these questions:

·     Who is your provider? 

·     What fund are you in?

·     Is your tax rate correct?  

·     Are you getting all the benefits you can?  

·     Are you 'aligned' with the philosophy of your KiwiSaver provider?

Velocity is happy to work through these questions with you to ensure your KiwiSaver is good to go either to build a deposit towards your first home or to help set you up for retirement.

Brendon Ojala (FSP119244) is a Financial Adviser with Velocity Financial (FSP95466). No investment decision should be taken based on the information in this blog alone. A disclosure statement is available upon request.

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