The spread between highest and lowest average KiwiSaver scheme balances has hit more than $33,000, the 2016 Investment News NZ (IN NZ) analysis of the sector has found.
According to the IN NZ research, the distance between the lowest and highest average member balance increased by about $3,000 year-on-year.
The analysis found the scheme with the lowest average balance as at March 31 this year stood at just under $6,500 while the highest was nudging $40,000.
Some of the IN NZ research results published last week in the 2016 KiwiSaver report titled ‘The front nine’, also found a wide divergence in scheme member engagement as measured by ‘non-contributing’ statistics.
The non-contributing figures, which include both those members on official ‘Section 104’ contribution holidays and others deemed as non-contributors, ranged from zero per cent for the recently-launched NZ Defence Force scheme to almost 60 per cent at the original Fisher Funds KiwiSaver.
While the median scheme ‘non-con’ rate stood at about 33 per cent, the average non-contributing rate across the total 2.6 million KiwiSaver membership as at March 31 this year was roughly 43 per cent, the IN NZ study shows.
The vast majority of ‘non-con’ members fall into the ‘other’ basket with the 104s typically representing about 10 per cent of holidaying members. For example, the single-biggest KiwiSaver scheme – the ASB product – recorded 21,230 members on official 104 breaks and almost 180,000 informal dropouts for a total non-contribution rate close to the overall average of 43 per cent.
With the exception of the Kiwibank-owned Kiwi Wealth, BNZ and the SBS Lifestages schemes (which all reported non-contribution rates in the low 30 per cent range), all bank KiwiSaver products had non-con levels at or above the 43 per cent average.
In total about 1.1 million members were classed as non-contributing as at March 31, the IN NZ report found, with perhaps a third of those likely to be under-18s. The most recent Inland Revenue Department (IRD) KiwiSaver data shows about 352,000 members were aged under 18 as at June 30 this year.
The number of under-18 members has dropped considerably since the government cancelled the $1,000 ‘kickstart’ payment – the only incentive open to the junior KiwiSaver cohort.
“With the removal of the ‘kickstart’ incentive last year – followed by a dramatic fall in the under-18s comp – it is possible the ‘non-con’ rate may drop over time,” the IN NZ report says.
‘The front nine’ also found the KiwiSaver transfer market, while slightly down on the previous year’s hyperactive experience, remains highly competitive with, mostly, familiar names winning the battle.
“The same banks as 2015 (BNZ, Kiwi Wealth and Westpac) also feature in the top five transfer winners’ circle in the same order as previously. But the Auckland-based boutique firm, Generate, has pulled off the major shock of the 2015/16 tournament, ranking third overall in the net transfer stakes,” the IN NZ report says. “After clawing in an almost net $100 million from rival schemes over the year, Generate, has achieved the double as the fastest-growing scheme (of those with more than 5,000 members) as measured by both funds and membership.”
The findings in ‘The front nine’ report are based on figures collected from the annual reports of 30 KiwiSaver schemes.
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 a not-unreasonable fee of $260 plus GST ($299 including GST).
Please contact the author at david@investmentnews.co.nz or
ph +64 6 878 4295 for further details.
