KiwiSaver member growth is continuing at a solid clip with total membership edging 2.5 million, according to the latest Inland Revenue Department (IRD) statistics.
Over the previous 12 months KiwiSaver member numbers grew 7.5 per cent to hit almost 2.49 million as at the end of March 2015, the IRD figures show.
The membership figure represents over 55 per cent of New Zealand’s total population, most recently estimated to be about 4.5 million. All NZ residents up to age 65, including children, are eligible to join KiwiSaver.
With net monthly membership growth averaging roughly 15,000 per month KiwiSaver should breach the 2.5 million-member mark in April.
During the 12-month period over 24,000 KiwiSaver accounts were closed, with retirement accounting for 75 per cent of member exits.
However, the number of members on ‘contribution holidays’ grew by 6 per cent over the year to reach 118,314 – or 4.75 per cent of total KiwiSaver membership. (Under KiwiSaver rules members can suspend contributions for up to five years, although the ‘holiday’ can be extended indefinitely. According to the IRD figures, almost 100,000 members have gone into holiday mode for at least five years.)
But as holidaying increased in popularity, the number of New Zealanders opting-out of KiwiSaver actually declined over the year. New employees are automatically-enrolled in KiwiSaver by their employers but have an eight-week period to opt-out of the scheme.
As at March 2015 just over 236,000 people had opted-out, almost 8,000 fewer than 12 months previously, suggesting former KiwiSaver skeptics have either made an active choice to join or succumbed to auto-enrolment as they change employment again.
The IRD data also shows just over 43 per cent of members auto-enrolled in default funds have since made an active choice. According to the figures, about 978,000 members originally entered KiwiSaver via auto-enrolment with only 553,402 remaining in default schemes as at the end of March this year.
While the IRD auto-enrolled about 6-7,000 individuals in KiwiSaver each month over the period, actual default fund membership increased by only 12,844 during the 12 months to the end of March – indicating the nine default schemes (increased from five in 2014) are accruing roughly 100 members each month.
The IRD figures also show transfers between schemes remains high with approximately 13,000 members switching KiwiSaver provider each month. While the transfer rate is reasonably steady month-to-month, the number of members switching schemes ranged from 9,870 in April 2014 to a high of 19,286 in November of the same year.
Over the 12 months to the end of March more than 153,000 members, or about 6.2 per cent of total KiwiSaver membership, changed schemes.
During the annual period almost $4.7 billion flowed into KiwiSaver schemes, of which government contributions represented about $808 million, according to the IRD figures.
Total KiwiSaver FUM is close to $30 billion.