The government has put a life-cycle option on the agenda as it gears up for a review of the KiwiSaver default provider regime, Commerce Minister Kris Faafoi told a jam-packed Financial Services Council (FSC)/Workplace Savings NZ (WSNZ) conference last week.
Speaking at the FSC dinner event last Thursday night, Faafoi said the government would consider the life-cycle question as part of a raft of potential reforms – most notably with a focus on fees – under the statutory review of default providers next year.
His comments followed the earlier release of the final tranche of the FSC-funded KiwiSaver research project that culminated in four overarching recommendations including a rethink of default fund settings (currently set in conservative mode).
The FSC ‘Shaping Futures: Closing the KiwiSaver Gap’ report calls for:
- Changes to enable flexible, controlled and automatic increases in contributions;
- A pan-political agreement on the long-term strategy for KiwiSaver;
- A review of default fund allocation, incentives such as multiple retirement ages, and a centralisation of the hardship application process; and,
- Easier access to advice for members including through technology.
The government has already introduced legislation allowing a wider range of contribution levels (including a new top rate of 10 per cent).
FSC chief, Richard Klipin, said in a release: “The recommendations are ambitious, and it’s heartening to see the government is making moves to address some of these issues. It’s a great start. We believe they are achievable and they will provide a blueprint for closing New Zealand’s future savings gap.”
The industry unsuccessfully lobbied the government to introduce an age-based default model for automatically-enrolled KiwiSaver members both prior to the regime launch in 2007 and at the first review of default providers in 2013.
In a busy period for the industry body, which attracted a sell-out conference crowd of 400 to the Pullman last week, the FSC also launched its long-awaited code of conduct – 18 months in the making.
The FSC code incorporates nine core standards grouped under three sections: ethical; customer perspective; and, customer outcomes. Breaches of the code – which includes a directive to “treat customers fairly” – could result in fines of up to $100,000 and cancellation of FSC membership.
Currently, the FSC has 17 full members – sourced largely from the insurance industry – and 15 associate members. WSNZ – involved in a protracted merger process with the FSC – boasts just under 100 members from the employer superannuation, KiwiSaver and related service provider industries.
Both bodies presented their annual awards at the conference dinner last week with the WSNZ winners including:
- ANZ Investments, which picked up the most innovative communication (for its KiwiSaver member statement) and excellence in communication prizes;
- Whai Rawa for product disclosure statement of the year; and.
- AMP for the best overall KiwiSaver member experience.
Meanwhile, the FSC winners comprised:
- two AMP winners – Jenn Dobinson as Rising Star and Peter Kenny for the Innovation Award;
- AIA’s Treena Jordan for the Diversity prize; and,
- Ben Rose from health insurer nib who picked up the Shaping the Future gong.