Over 211,000 KiwiSaver members changed schemes during December, according to newly released Inland Revenue Department (IRD) figures, in a monthly statistic highly distorted by the default transition process.
The KiwiSaver scheme transfer tally in December of 211,568 is about 200,000 above the monthly average, suggesting most of the forcibly re-homed default members shifted across before the end of 2021.
In total roughly 224,000 members were expected to transfer under the regime change on December 1 that required five providers – AMP, ANZ, ASB, Fisher Funds and Mercer – to hand over their hard-core default cohorts for redistribution among the six approved schemes.
Post December 1, each of the six default providers – BNZ, Booster, Kiwi Wealth, Simplicity, SuperLife and Westpac – were due to receive an estimated extra 37,300 members and $390 million apiece.
The default shake-up may see some minor adjustments in the retail funds market share of providers on both sides of the ledger, however, without disrupting long-entrenched trends.
Based on the September 2021 NZ retail fund market share figures published last week by Australian researcher Plan for Life (PFL), the default reshuffle alone is unlikely to change manager rankings.
Atop the PFL table, ANZ and ASB reported total retail funds under management of $32.3 billion and $19.6 billion, respectively, ahead of third-placed Milford Asset Management ($14.9 billion). Westpac ($14.2 billion), which dropped to fourth behind Milford during the September quarter, could gain some ground on high-flying boutique with the default boost but almost certainly not enough to regain third-place if fund flow and performance trends have held over the following four months.
As at September 30 last year, Fisher Funds held almost $11 billion in retail funds, the PFL survey shows, about $1 billion behind AMP. Both Fisher and AMP lost out in the default reforms but the former may rank higher in the December quarter retail manager tables following its purchase of the Aon KiwiSaver and employer super book late last year that added some $1 billion or so to its FUM.
The PFL September quarter survey shows overall NZ retail FUM hit close to $144 billion by the end of the three-month period, up 17.3 per cent year-on-year.
“There were significant net fund flows into KiwiSaver and Unit Trusts but the other two markets [superannuation and insurance/investment bonds] saw net outflows,” the PFL report says. “The average overall annual investment return on funds was a strong 11.3%. All leading companies were up with in particular 20% plus jumps in funds reported by Milford (60.2%), Booster (32.9%), Fisher (31.3%), BNZ (23.8%), Mercer (22.8%) and Kiwi Wealth (21.5%). Market leaders ANZ (11.2%) and ASB (11.5%) also both finished higher.”
Gross retail fund inflows rose 2.8 per cent during the 12 months to September 30 to a new record of $10.2 billion, PFL says.
“Some very big percentage Inflow jumps were recorded by Mercer (135.2%), Milford (50.2%) and Fisher (34.6%) but these were largely offset by falls reported by AMP (-22.3%), ASB (-17.0%), BT / Westpac (-16.8%) and ANZ (-16.1%),” the report says.
The KiwiSaver market reached almost $90 billion as at September 30, rising more than 21 per cent year-on-year, while other managed funds closed in on $46 billion (up 13.1 per cent for the 12-month period).
Meanwhile, the IRD statistics reveal a more-or-less steady-state KiwiSaver market at year-end – bar the wholesale default move – with on-trend growth in members and withdrawals and contributions remained in a tight range.
December saw a slight increase in financial hardship withdrawals (although only covering almost 1,800 members and $10.8 million) while first home cash-outs dropped to $124 million compared to $143 million in the previous month.
The number of members on contribution holidays – a broad signal of underlying financial distress in NZ – fell again in December to 107,100, or almost 14,000 fewer than in February 2021.