Q This probably sounds a stupid question, but how do I find which company my KiwiSaver savings is going into? I thought everyone's money went into the same basic fund, but on reading your column I realise there are lots of funds with different companies such as ASB and Tower.
A The easiest way to find out is to go to the official KiwiSaver website at www.kiwisaver.govt.nz and log in with your IRD user name and password. If you do not have a user name and password, create one. Once you have logged in you will find a record of all transactions processed by IRD and the name of the scheme or fund you are in.
If you do not have access to the internet, ask your payroll person which scheme you are in. Or wait until you receive a confirmation letter from the fund manager directly.
I am guessing you were "auto enrolled" to KiwiSaver through your workplace (otherwise you would know which scheme you are in, having chosen it yourself). IRD processes the KiwiSaver payments for working people and passes the money on to the fund manager through the PAYE cycles.
People who are automatically enrolled when they start a job are randomly allocated to one of the six default providers by Inland Revenue - namely AMP, ASB, OnePath, Mercer, Tower or AXA (now owned by AMP).
These six are not the only KiwiSaver providers. At the moment there are 32 providers, ranging from the extremely large, such as ASB or ANZ, down to the quite small, such as the New Zealand Harbours Super Scheme. Calls have been made to ditch the default system to provide a more level playing field for all providers, and the agreements will be reviewed in 2014.
If you have indeed been randomly allocated to the fund you are in, do not assume that it is the best one for you. For example, all default funds are conservative. Why? Because Inland Revenue (or the Government) would not want to be blamed if you experienced more volatility than you can tolerate (or to put it bluntly, if your fund loses too much money). Fortunately, conservative funds have purred along quite nicely over the past five years, averaging from 3.8 per cent to 5.6 per cent per annum before tax.
The last 12 months have seen better returns for many of the more aggressive funds, however, and those investors in a default fund with a longer-term outlook and some tolerance for risk should think about reviewing their fund. It is easy to switch from one fund to another, but it has to be done for the right reasons (not just because it's easy to view through online banking or because you have insurance with the same company).
When I ask around, I am surprised how many people do not know which KiwiSaver fund they are in. Make it your business to find out. Read the information that the fund manager sends you. File the statements they send you. Learn how your money is invested.
You won't get this information from the IRD website, or information on the returns of the fund or the fees that you are paying. You can get this either directly from the fund manager or through financial websites such as www.interest.co.nz or www.morningstar.co.nz. As the balances in KiwiSaver grow, investment strategies and returns will become more important, so get to know your KiwiSaver fund now.
Shelley Hanna is an Authorised Financial Adviser FSP12241. Her disclosure statement is available on request and free of charge by calling 8703838. The information contained in this article is of a general nature and is not intended to provide personalised advice. If readers have any KiwiSaver questions they would like answered, please go to www.peak.net.nz or email firstname.lastname@example.org