KEY POINTS:
KiwiSavers are still experiencing problems with Inland Revenue including failure to transfer money to scheme providers, lack of up-to-date reports on contributions, and confusion over whether their money is going to a default provider or one they have selected.
Peter Roband, a partner in a small company on
Auckland's North Shore, said all four of his employees who had joined the scheme were experiencing troubles.
He had struggled to get a balance of how much money was in his scheme despite signing up right from the start and nominating a provider within the first three months of joining.
He was automatically enrolled with the ASB even though he selected AMP, and he is still waiting for around 3 1/2 months worth of contributions to be transferred from the ASB to his preferred provider.
He was so concerned about a lack of information on where his money was going that he wrote to MP Peter Dunne and was told to contact the IRD to get a report.
But Roband said even the IRD was three months out of date.
While the AMP had an online service for its KiwiSaver providers, Roband said, it was still registering a nil balance although the company had confirmed it had received some of his contributions and continued to reassure him a figure would appear soon.
"If I went and put my money in the bank I would not expect to have to wait seven months to get a statement. It's a great scheme that has had a really bad start. It seems to have been brought in with a hiss and a roar but clearly the IRD and providers were ill-equipped."
He said the situation would have been made easier if the Government and the IRD had said it was having issues."But they haven't even admitted as much."
Roband's story is similar to that of Julie who works at a dentistry firm in Tauranga. She says five staff members joined and while their issues have now been resolved they had to ring the IRD constantly to get satisfaction.
"I would ring the IRD every week and our consultant was ringing every day."
She said the money was not being transferred from the IRD to their selected providers, despite them being told on numerous occasions that it had been.
"If it was the other way around and I owed money to the tax department I would have had the police coming around by now," she said.
Financial adviser Jamie Coltman, who has had to deal with problems for both staff members and clients, is so concerned he is considering gathering the advisory community together to lobby for something to be done.
He said he had approached fund managers to do something but many were scared they would lose out if the Government reviewed the system. "They don't want to be placed in a position where they have to go up against the Government."
Inland Revenue spokeswoman Chris Morrison said the IRD wanted to assure people that their money was safe and that all contributions not yet passed to scheme providers were being securely held and earning net interest, after tax, of 5.36 per cent.
"The system contains inbuilt checks and balances so that Inland Revenue can ensure that everything is correct before passing money on to the providers. For new members, there is a delay of three months so that Inland Revenue can ensure we have the correct information about the new member, and to allow people to change their provider, seek financial advice, or opt out if they have been automatically enrolled ... "
According to the IRD around 98 per cent of the approximately 500,000 contributions received from July to September have been processed. Around 9000 contributions for the period remain outstanding.
