Inside Money

Business writer David Chaplin blogs on personal finance

Inside Money: Fantastic statistics - another year in KiwiSaver

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Competition between KiwiSaver providers is heating up. Photo / Hawkes Bay Today
Competition between KiwiSaver providers is heating up. Photo / Hawkes Bay Today

We seem to operate at the same speed, the Financial Markets Authority (FMA) and me, publishing our respective KiwiSaver surveys within a matter of days.

For the record I was first, though, sneaking in just ahead of the FMA's yearly KiwiSaver round-up with my own analysis based on data retrieved from the annual reports of about 40 schemes.

There are some important differences between the two reports, of course.

Being a polite organisation the FMA does not name the KiwiSaver schemes it surveys, whereas mine tracks individual providers.

The FMA report is also more comprehensive in that it also includes corporate-only KiwiSaver schemes (for example, Foodstuffs or Tait Electronics) that I excluded on the grounds they are such a tiny part of the market.

Despite this our numbers more or less tally up, which is encouraging news for those interested in accuracy.

While I was looking more for provider trends, the regulator delves deeper into the aggregate behaviour of members.

For instance, the FMA notes almost $29 million was withdrawn from KiwiSaver schemes over the 12 months to March 31 this year, up from about $17 million in the previous period.

The statistic shouldn't surprise anyone but it's hardly alarming either - what's $12 million in the scheme of things?

According to the FMA, the increase in hardship exit grants "reflects the weaker economic climate, following the Global Financial Crisis (GFC), and also the effect of the Christchurch earthquakes".

More pertinent from a provider perspective is the FMA comment that: "Over the next five years it is estimated that 155,000 KiwiSavers will reach retirement, and approximately $2.3 billion in assets could be unlocked from KiwiSaver schemes".

Another interesting statistic gleaned from the FMA report is the number of members transferring between KiwiSaver schemes over the year. About 200,000 individuals - or just over 10 per cent of the total KiwiSaver membership - swapped schemes during the period, shifting about $740 million in the process.

In the previous year about 134,000 members transferred to a different KiwiSaver scheme, equating to roughly 8 per cent of total membership at the end of March 2011.

The figures indicate competition between providers is heating up even as the overall growth rate of KiwiSaver inevitably slows down - a state of affairs borne out by my research too.

Despite the tougher competition and shrinking opportunities word has it that three or four organisations are considering launching new KiwiSaver schemes.

Go figure.

- NZ Herald

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