Q. I have been reading your columns lately and want to find out more about the KiwiSaver Scheme I am in. I started KiwiSaver five years ago and I am in the ASB Conservative Fund. I don't bank with ASB and I didn't choose this fund, I thought KiwiSaver was all one big fund managed by the Government. I am 27 and single. Is ASB a good scheme to be in?
A. Good on you for deciding to find out a bit more about where your savings are going. There certainly is more than one KiwiSaver fund in fact there are more than 200, offered by about 30 different fund managers, including banks and private companies.
Apart from designing the legislation that introduced KiwiSaver in 2007 and its ongoing responsibility in regulating the scheme through organisations such as the Financial Markets Authority and Inland Revenue, the Government has no control over your KiwiSaver account.
What is a default scheme? The Oxford English Dictionary gives two meanings for the word default. The first is "failure to fulfil an obligation especially to repay a loan" - not ideal when you are talking about a long-term investment requiring considerable trust on the part of the investor that all will turn out for the best. In the case of KiwiSaver, the second meaning of default applies - "a preselected option adopted by a computer programme or other mechanism when no alternative is specified by the user".
Anyone who is opted into KiwiSaver when they start work is randomly allocated to one of the nine default providers by Inland Revenue when they receive your employer's PAYE return. In your case, this was ASB. At the time you would have received a letter of advice from Inland Revenue along with an investment statement for the ASB KiwiSaver Scheme. You would also have received a welcome letter from ASB.