The Government has released details of its new set of default providers for KiwiSaver, following an extensive review process.
Announced at the end of last week, only four of the nine existing default funds have retained their place, while two new providers have been added to what will be six default funds that will operate from 1 December 2021.
The following table documents the current and new providers for KiwiSaver default funds:
According to the Ministry of Business, Innovation & Employment, the new panel of six providers was determined following a tender process during which the applicants were assessed against a set of key criteria which included:
- Fees
- The provider’s organisational structure and standing
- The provider’s ability to:
- Deliver the investment product
- Manage transitional arrangements
- Provide a good customer experience for their members
The Government notes the following settings, which are all different to those attaching to the current default funds, will apply to the new panel:
- The investment fund type has moved from conservative to balanced
- KiwiSaver fees will reduce, and be simpler and more transparent
- Default providers will be required to engage with their members to help them make informed decisions about their retirement savings at key points
- Investment in fossil fuels and illegal weapons will be excluded from default funds
- Default providers will be required to maintain a responsible investment policy on their websites
MBIE notes all default KiwiSaver members – defined as members in a default fund who have not yet made an active choice to remain there – will be transferred to one of the appointed default provider’s KiwiSaver funds.
It adds the transfer of default members is happening to ensure default members continue to receive the protections and benefits of being in a default fund, such as low fees and minimum service standards.