People want to know how much they are paying for fees in a dollar form. Photo/Getty Images.
People want to know how much they are paying for fees in a dollar form. Photo/Getty Images.
Seeing all fees put into a dollar figure is the second biggest priority for savers behind returns for KiwiSaver members, according to research by Mercer.
The KiwiSaver provider is one of three providers out of the eight largest to put a dollar figure in its annual member statements for allfees charged.
Sarah Whitelock, principal product leader at Mercer, said the company re-designed it's annual statements several years ago after undertaking extensive research with members.
"One of the things that came out of was moving to fees shown like this."
Mercer's statements show a dollar figure for the member fee which is charged directly to a person's account but also breaks out the exact dollar figure for management costs, admin, trustee and all other expenses in a separate box.
Those expenses are charged to the fund as a whole and many providers don't currently break them out in a personalised dollar amount leaving many KiwiSavers in the dark over exactly how much they are paying for someone to manage their money.
The government is moving to change the requirements for the annual member statements and hopes to have them in place for next year requiring all KiwiSaver providers to give a dollar figure for all fees charged.
Whitelock said with the introduction of the Financial Markets Conduct Act the reporting of fees had become more clear and more consistent but it was still not fully consistent across providers.
"We have provided some information to the government on how we calculate our figures."
Whitelock said while fees were important they were also just one part of the KiwiSaver jigsaw puzzle.
Sarah Whitelock, principal product leader at Mercer, says seeing fees in a dollar form was a priority for its KiwiSaver members.
For savers with a large balance the type of fund - whether it is conservative, balanced or growth - could have a bigger impact on their total return than the fees, she said.
While for those with very small balances missing out on the government's annual subsidy of up to $521 per year could have bigger impact.
Savers can get 50c for every dollar they put in up to $1042 so even putting in a small amount of money attracts some of the subsidy.
But many are missing out altogether by failing to put any money into their accounts.
Whitelock said of its 100,000 members 30,000 completely missed out on the subsidy last year and a further 23,000 didn't get all of it.
"That is even with us running campaigns specifically targeting those people."
But it has made progress and Whitelock said the percentage of its members getting the full subsidy had increased over the last three years with its efforts to promote the subsidy.
"It is for us moving in the right direction. But there is still money sitting there that could be invested in New Zealander's KiwiSaver accounts."
