The average KiwiSaver balance hit $11,440 as at March 31 this year, according to the latest statutory report on the sector.
Released last week, the Financial Markets Authority (FMA) 2015 KiwiSaver report shows almost $28.5 billion was divided among more than 2.48 million members and 39 schemes as at balance date.
Earlier research by Investment News NZ (IN NZ), which excluded six small corporate-only schemes, found average member balances ranged between $3,800 for start-up Islamic fund, Amanah, and almost $34,000 for the upmarket Milford scheme.
The IN NZ study found 10 schemes scored an average member balance over $20,000, with ANZ’s adviser-distributed OneAnswer the only bank-owned KiwiSaver making this elite group.
KiwiWealth, owned by Kiwibank, recorded the highest average member balance (just over $16,000) for a bank-distributed scheme, the IN NZ research shows. The most recent bank entrant to the KiwiSaver market, BNZ reported the lowest average member balance of $7,742 in the IN NZ study.
Meanwhile, the FMA reported a record total KiwiSaver gross investment return of $3 billion over the period as well as historically high withdrawals of more than $740 million, mostly due to members reaching 65 ($422 million) and first home drawdowns ($214 million).
The FMA report also lists total KiwiSaver fees and expenses of about $270 million for the period and tax of almost $223 million.
KiwiSaver membership grew 8.3 per cent over the year, the FMA says, down from a “9.6 per cent increase in the previous two years, and a 14 per cent increase in 2012”.
“Just over 1 million members are regarded as noncontributors, which means they have not made a contribution in the previous two months, or they have failed to make their contracted payments,” the report says.
“The percentage of non-contributing members fell from 44.5 per cent last year, to 42.6 per cent this year.”
In a client news alert, legal firm Minter Ellison Rudd Watts says the FMA report “provides little commentary as to why” KiwiSaver trends such as high non-contributing member rates.
“… [the FMA report] does not identify why the self-employed might choose not to contribute regularly. Arguably, comment of this type maybe out of scope for the Report, but understanding the reasons for trends will be important for the sector,” the Minter Ellison note says.
“Likewise, a private sector view, titled ‘Pieces of eight’, recently published by Investment News NZ is also short on the “why” of recent KiwiSaver trends. The ‘Pieces of eight’ report includes an analysis across 33 KiwiSaver schemes and also a tally of service providers. A link to ‘Pieces of eight’ is available here.”
The FMA report says while KiwiSaver funds under management was boosted by strong returns and membership growth it also received a small fillip from transfers in from other local and offshore super schemes.
Of the $232 million influx from non-KiwiSaver schemes, about $80 million arrived via Australian superannuation accounts – more than double the previous year.
But despite the dollar amount increase in Australian super transfers over 2015 compared to the previous annual period, the number of KiwiSaver members making the trek across the Tasman fell slightly year-on-year, according to FMA figures.
The FMA report shows 952 members transferred a collective $77.9 million from Australian super schemes over the year, compared to 966 members and only $32 million during the 2014 annual period.
When the Australian government legislated the trans-Tasman super portability regime in 2012 (two years after the NZ government passed its part of the bargain into law), it was estimated over $16 billion sat in ‘lost’ super accounts.
“We expect that much of this money could belong to New Zealanders who have returned home and these new rules will allow these funds to be brought back to New Zealand,” Finance Minister, Bill English, said at the time.
As well as the Australian super transfers, the FMA report says inflows from other offshore superannuation schemes increased over the year. However, changes to the UK Qualifying Registered Overseas Pension Scheme (QROPS) during this year, which ruled out KiwiSaver schemes from the process, could see that figure decline in future years.
While the FMA does not separate out transfers in to KiwiSaver from NZ-based super schemes, that figure could be on the rise as the introduction of the Financial Markets Conduct Act (FMC) prompts the closure of employer-based funds.
This is the first year the FMA did not produce a report on the employer and non-KiwiSaver retail super market. According to an FMA spokesperson, following the repeal of the Superannuation Schemes Act (which was superseded by the FMC) last December there was “no requirement to produce a report”.
Last year the FMA superannuation report recorded total assets of more than $20 billion stored in 457 schemes and servicing over 380,000 members as at the end of December 2013.