KiwiSaver is in for its biggest shake-up in some time this year as the Government decides who will be given default provider status.
Providers had to put in their request for proposal to the Ministry of Business, Innovation and Employment by December 18 last year and now have to go through an extensive evaluation process.
A spokesman for MBIE said it could not say how many KiwiSaver providers had put in a submission at this stage.
"This is because, with procurement tenders, disclosing the numbers of RFP respondents and details about those respondents may prejudice our negotiations with them.
"We will be able to disclose the numbers once government ministers have announced the providers they have appointed."
More than 3 million people are signed up to KiwiSaver. Of those 381,034 KiwiSavers are default members with a total of $4 billion in funds under management.
KiwiSaver members are allocated to a default provider scheme when they are automatically enrolled through starting work or changing jobs and do not choose their own KiwiSaver provider.
The nine current default providers are ASB, ANZ, AMP, Fisher Funds, Mercer, BNZ, Westpac, KiwiWealth and Booster.
But every seven years the Government holds a tender process to decide who will be appointed as default scheme provider.
The Government has indicated this time around it may look to appoint fewer providers with it stating a preference to appoint a minimum of five although more could be considered if doing so does not materially reduce overall value for money.
David Boyle, a former KiwiSaver education expert who now works for non-KiwiSaver provider Mint Asset Management, said he expected all of the current default providers to reapply.
"I'd be very surprised if they didn't apply."
Outside of that group he said two or three others could also apply, pointing to Simplicity as a likely contender.
Some smaller new providers were ruled out of the process early as the RFP had a minimum pre-condition of having funds under management of at least $100 million.
Boyle said a reduction in the number with the default status would be significant to those who lost it.
"if it goes to five it means there will be four very unhappy providers - one because they have lost that [Government] tick and the current clients would then be redisbursed to the remaining default providers that were appointed - I can't imagine anyone being very happy with that - and it would have a little bit of an impact on their brand as well because there would be some media attention around that."
Switching members to another scheme would also be quite a logistical exercise, he said.
It means all of that person's investments must be sold before the money is transferred and then reinvested by the new provider.
Even default providers who keep the appointment will have changes to make as the setting is changing from conservative to balanced, which will see the funds having to increase investment in growth assets like shares and property.
Boyle said the transition would need to be handled carefully as it could drive some short-term anomalies in the New Zealand share market.
"That would need to be thought through."
But he said it could be a positive for those default members who were unengaged - some of whom may not even know which provider they are currently with.
"It is another chance to get engagement and see whether there is an ability to get them better connected to who their provider is. It will take a bit of time and cost."
The default schemes will also have to exclude investments in fossil fuel production and weapons and have low fees.
Applicants are being graded on two elements - their technical ability to meet the requirements and the fees charged.
Fees will have a higher weighting with 60 per cent awarded to that aspect.
The MBIE spokesman said it was now evaluating the RFP responses.
"Following this, once advice and recommendations have been made to government ministers, the successful applicants will be appointed through instruments of appointment. We expect to announce the new appointees in early May 2021."
The new default providers will then come into force from December 1, 2021.
If a current default providers does not get reappointed then its members will be reallocated to the new default providers.