If you are in a dud KiwiSaver fund, you might not know any different.
But in 20, 30 or 40 years time it could be the difference between being able to afford to go on holiday, eat out or even just buy a bottle of wine in retirement.
Kirby Rappell, chief executive of SuperRatings - an Australian ratings agency that analyses KiwiSaver funds, says knowing your fund is a dud comes down to three things.
"Are your returns decent? Are your fees decent and do you get service by your fund manager? There is obviously all the pieces underneath it all but from a consumer perspective what they are seeing each day, those are the three things typically."
Rappell said to do a comparison people should start with a copy of their fund's annual statement, usually sent out once a year around May and then compare both the performance and the fees to the median KiwiSaver fund in a comparative category.
SuperRatings and its rival Morningstar both run performance tables comparing conservative, balanced and growth funds.
Morningstar releases its data quarterly and SuperRating has an annual report which also compares the net benefit of funds - what people get in the hand after taking into account the performance, fees and tax.
Government-backed website Sorted's also has a KiwiSaver fund finder tool which allows users to check out where their fund ranks on fees, performance and service.
Sorted's personal finance lead Tom Hartmann says fees need to be reasonable.
"If the fees are not reasonable compared to its peers - it can be considered a dud. Essentially what you are wanting to do is a bit of a cost benefit analysis, if you see fees are higher than average ask; are they justified, are they reasonable?"
But, says Hartmann, it's not necessarily about picking the cheapest fund but being aware that paying more for something does not necessarily get you a higher quality product.
"It's very different from say, buying a car."
He says if a provider is charging more it means they are not passing the returns on to you, they are keeping more for themselves.
Chris Douglas, a principal with MyFiduciary says the general rule is if you are paying more than 1 per cent of your account balance in fees then it needs to give a really good return.
"And if you are paying more than 1.5 per cent then you have got to make sure you are in a really, really good fund. So my view is anything over 1.5 is actually a dud because it is a really expensive fee to be paying and anything over 1 per cent is actually expensive - that is for a growth fund.
"If it's a cash or conservative fund - if you are paying anything more than 0.5 per cent then I think you are in a bit of a dud and there is a lot out there. There is a lot of conservative funds that are charging 1pc or 0.8 or 0.9 per cent and it is just a very high fee to be paying for something that is basically yielding you about 1 per cent at the moment."
But there are some providers out there that seem worth paying more for.
Rappell notes that Milford Asset Management has higher fees but has also had consistently higher returns meaning it tops or comes near the top of the tables in Superratings' net benefit analysis.
"Their fees aren't cheap but their returns are really good.
"And then conversely ASB has had some pretty good returns over the years as well but they have got a much simpler, cheaper structure."
"You want to check the earnings and you want to check the fees because it is really both that is going what you get to eat at the end of your journey in KiwiSaver."
Sorted's Hartmann says it doesn't advocate for the idea of picking funds based on their investment performance as past performance is not guarantee of future performance.
"We don't advocate picking the best performer because it could be the worst next year. They can have a good quarter or bad quarter but then they revert to the average.
"It swings so it is not a good way to pick at all but we can say if a fund has consistently underperformed its peers for a long period of time then it is a dud.
"That is what you want to look out for - it could be a sign of mismanagement or could be a sign of bad luck."
Investment performance should be compared over the longest time possible at least five years and 10 years is better still.
"The longer the better, but obviously some are newer funds and you won't have that luxury," Hartmann says.
Service is also an important factor.
Rappell says some KiwiSaver members found out their provider's service wasn't up to scratch the hard way during 2020's Covid market melt-down when they couldn't get hold of their provider.
"That was a real challenge for some during Covid."
Rappell says good service means the provider should have online tools to help people decide which fund they should be in and calculators to work out how much they need to save for a comfortable retirement.
But they should also have a contact centre to answer people's questions, give advice and resolve any problems.
Rappell says increasingly an app is important too.
Sorted surveys providers every six months on their services and allocates a percentage rating but it's more about the quantity of services a provider has than the quality - that's something you might need to ask around about.
Douglas says if you haven't heard from your provider in over a year that could be a red flag as well.
Wrong fund for you
Sometimes it's not about the fund being a dud as such but that it is simply the wrong fund for you.
Hartmann says even if a defensive fund is a star performer it can be dud for you if you have a long time until retirement and don't need the money to buy a house.
"If it doesn't match your situation, your circumstances and more specifically your timeframe and your comfort level with the ups and downs that come with certain levels of risk - it might not be a dud in general but it might be a dud for you."
Douglas says many of those in default funds - where people are automatically allocated if they don't choose a KiwiSaver fund - are sitting on a dud.
"I think that if you are in a default fund and you have got a long investment horizon and you haven't done anything since moving into KiwiSaver then your fund is a dud.
"It is highly unlikely that fund will match what your objectives would be for KiwiSaver which is to maximise the return you can over the timeframe you have to invest."
Douglas says making sure you are in the right fund for your risk profile and investment time horizon is critical.
"I know people will sit there and say - well we learned a lot about people's risk tolerance with Covid, and we did, we learned that people are very quick to switch and they do have that ability with KiwiSaver.
"But I still believe there is a lot of people out there that don't properly make sure that they are in the correct risk profile. And that is going to have the biggest determinant of what their future cash balance is like - how much they have when they reach retirement age."
What have you got to lose?
Rappell says its modelling has shown if you get 2 per cent per annum less per year than you could be getting that will mean you could be up to 30 per cent worse off when you retire.
"If you are stuck in that dud fund for 10 years and only figure out in 10 years time and then switch to a good fund you are not going to get that 10 years of low performance back.
"It is already baked in and you are not going to be able to catch it up. The biggest payoff is checking your KiwiSaver provider now, and making sure they are competitive and diarising that every two or three years you are going to check again to make sure it is keeping pace with the market."
"The real challenge is you don't get a sugar hit right now but when it comes to retirement that extra $50 or $100 a week over the pension makes a huge difference to people."
Hartmann says an average earner who sits in a conservative fund for the whole of their working life could potentially have $100k less in their hand at retirement than if they had been in a growth fund.
"Now that is a huge difference in terms of they way you live in retirement and how you retire and what your retirement situation is."