Inside Money: Default settings due for remix
9:30 AM Tuesday Oct 30, 2012
A report detailing proposed changes to the KiwiSaver default scheme system is expected soon. Photo / File
The initial report detailing proposed changes to the KiwiSaver default scheme system is expected out any day now.
This would put the review process on schedule, which, according to the terms of reference published in May, was due for completion by the end of the year.
It is understood the review will recommend some wide-sweeping changes to the default system, particularly around the portfolio settings that are currently heavily skewed to conservative investments.
A source close to the review hinted the discussion document would favour some kind of age-based, life-stages investment style for default KiwiSaver schemes rather than the existing one-size-fits-all arrangement.
Under the life-stages approach, younger default KiwiSaver members would have a higher proportion of their portfolios invested in shares a mix that would gradually shift towards less volatile fixed income investments over time.
Whether the review recommends this option should be implemented by the incumbent default providers or, as mooted last year, by a single, government-run scheme is a more intriguing but as yet unanswered question.
It's hard to see the National government approving that degree of state-nannying but the idea does have a certain appeal.
More likely is that there will be some kind of shake-up of the current default providers Axa, AMP, ASB, Mercer, Tower and OnePath either by opening the system up to more competition (KiwiBank and Westpac, for example, are lobbying for a slice of the default cake) or perhaps the opposite.
At the very least by next year the number of default providers will have shrunk to five (barring any new appointments) with the AMP/Axa KiwiSaver schemes expected to merge it is believed the legal consolidation process is already underway.
"I" would be interested to learn how many people believe in continuing to deposit into it until retirement age ?
So why do you wimps in media support the banks when you know they are fully engaged in creating vast amounts of money out of thin air for investment in non productive sectors which don't create stable long term economies and jobs etc while also contributing to the destruction of the planet. Are you all too, sick in the head like them, meaning the controllers and owners of the banks and their corrupt government mates who are aiding and abetting them at every turn.