Now in its 15th year of production, the Investment News NZ annual KiwiSaver report – released free to subscribers today – opens up on a period of major transition in the sector as default changes bed down and new schemes join the fray.
Based, as usual, on data compiled from annual scheme reports, the 2022 edition titled ‘Real tricky times’ , reveals the big market moves across the sector during a 12-month period that included both the biggest mass member transfer in KiwiSaver history and the front-end of renewed financial volatility.
The free report shows while the default switch-trick has briefly bamboozled the statistical flow, long-standing trends that have seen Australian institution-owned schemes gradually lose market share to local providers continue while costs, at least proportionately, remain in fee-fall.
Furthermore, the study adds some data-based musings just days after the government’s mishandled bid to introduce GST on KiwiSaver and other managed funds sparked an enthusiastic, if largely ill-understood, public outcry about an issue long considered buried by the industry. The IRD quietly shelved plans to remove GST from managed fund fees in 2019 following an intense, behind-the-scenes multi-year tit-for-tat with various industry parties – opting to continue the long-standing compromise of allowing the sales tax to apply to a portion of fund charges.
After ditching the GST proposal yesterday (a day after tabling the change in proposed tax legislation), Revenue Minister David Parker, said in a statement: “Generally it’s bad to have these sorts of distortions in the tax system as bigger players can exploit them, but if the sector as a whole is happy to operate with the status quo then we will leave them in place.”
Parker denied the whole thing was a trick designed to foist a new tax on fund investors but he might have saved a lot of time, and political magic, by reading the various IRD and industry papers on the GST for fund fees dating back to at least 2014.
“I am proud of Labour’s role in introducing KiwiSaver and its role in securing the future of New Zealanders,” he said. “We will never do anything to undermine it.”
Meanwhile, the show goes on, read all about it…
A complete set of the data in Excel spreadsheet form, covering member and funds under management trends; fees and expenses; investment returns; scheme transfers and other metrics, is available for the inflation-adjusted fee of $460 plus GST ($529 including GST).
Please contact the author at david@investmentnews.co.nz or
ph +64 21 022 575 03 for further details.