Why don't we care how much we pay for KiwiSaver?

Why do we care more about hunting down a bargain for flat screen TVs than our KiwiSaver investments? Photo/ Mark McKeown.

Why is it that Kiwis can sniff out a bargain when it comes to the latest flat screen tv or whiteware but we just don't seem to care when it comes to our retirement savings?

A Treasury report released this week looks at the reasons why people move their money from one KiwiSaver provider to another or choose one provider over another when joining KiwiSaver.

It found that neither cost nor a good or bad investment return year for a fund significantly influenced people's decisions.

In fact it notes that there was no significant relationship between fees and fund flows suggesting consumers may not be "price sensitive".

How can this be?

Fees can make a huge difference to a person's retirement nest egg.

Recent research by Canstar shows they can be hugely variable.

For a $9000 balance in a conservative fund fees ranged from $34.20 up to $149.70 for a year - a difference of $115.50.

Over 40 years of saving that difference adds up to a tidy sum of $4620 and that's not taking into account the missed compound interest on the extra fees.

Some suggest it's not that we don't care it's just that it's too hard to work out what the fees are.

There are so many different types - annual member fees, management fees, admin fees, trustee and expenses fees and they are usually charged as a percentage of the amount you have in KiwiSaver rather than a dollar amount which makes sense to the everyday person.

A new quarterly disclosure regime bought in two years ago to make it easier to compare funds hasn't helped much in my view.

The statements can be hard to find online - and the quarterly information only has to come out online.

The fee information isn't personalised but is expressed as a percentage of $1000 invested.

Having that information isn't going to be enough to judge whether you are getting a bargain or not - it then requires going the extra mile to compare it on the sorted website
through its fund finder tool.

But even that doesn't seem to have motivated many - the Treasury report notes there is no statistical evidence that introduction of the fund finder in late 2013 has had any impact on where people put their money.

Why don't we seem to care?