The FMA has published its annual KiwiSaver report, which has recorded a total of almost $50 billion dollars in funds and over 2.8 million investors over the 2018 period.
According to the report, over 32,000 New Zealanders withdrew a total of $723 million to help them buy their first home over the 2018 period, with the KiwiSaver HomeStart grant remaining a popular tool to secure an initial deposit.
Total assets in the scheme rose by $7.8 billion over the last year, and investment returns rose from $2.7 billion to $3.2 billion. The FMA says KiwiSaver has delivered positive returns for its members, which reflects the growth in asset prices globally.
“KiwiSaver is becoming a major part of individuals’ and the country’s wealth,” said Liam Mason, FMA director of regulation. “Our focus is on helping KiwiSaver members make informed choices. We want providers to make their reporting of fees transparent and easy to read – to help with this, fees in dollars now have to be shown in members’ individual statements.”
The FMA has focused strongly on financial literacy over the last year, with fees, disclosure and active decision making on the part of KiwiSavers taking priority. The number of members in default funds fell by 3% over the last year, and total default membership is currently at its lowest level since 2011.
Results of the FMA’s recent investor confidence quiz found KiwiSaver members to be the least confident and least informed of all investors surveyed, with many not understanding differences in volatility around investments into property versus cash. Lack of transparency around KiwiSaver statements has also accounted for many investors remaining in default funds; however, the number of default members making an active decision around fund type has now gone up to 28,603, up from 16,902 one year ago.
“Overall, default providers have improved their efforts to help their members make active decisions about their investment fund type,” Mason said. “We still think some providers could do more, and we’ve engaged with firms where we considered they needed to improve.”
The government will be reviewing settings for default providers next year, and the FMA says it expects member engagement to be considered as part of that review.