The KiwiSaver transfer market has cooled slightly in the 12 months to June 30, new figures from the Inland Revenue Department (IRD) reveal.
According to the latest IRD data, more than 140,000 KiwiSaver members switched schemes over the year to the end of June 2016 compared to almost 158,000 during the previous 12-month period.
While the final annual tally for the 2015/16 year may differ, based on the monthly data, the latest yearly transfer figure is also down on the 149,407 members who switched KiwiSaver providers during the 2013/14 period.
The IRD transfer data excludes scheme mergers.
Based on the most recent figures, scheme transfers represent just over 5.3 per cent of the approximately 2.64 million total KiwiSaver membership as at June 30 this year, representing a proportional decline year-on-year.
According to a September 2015 Treasury report, the average annual scheme transfers “were volatile in the early years of KiwiSaver, with the transfer rate just below 10% in 2010”.
“The rate has now stabilised at an average of 6.5% over the past four years, with minor fluctuations around this level,” the Treasury report says. “This is slightly higher than Australia, where an average of 5.1% of superannuation products is likely to be moved in the next 12 months.”
The Financial Markets Authority (FMA) flagged the high scheme transfer rate in its 2014 KiwiSaver report as an area of concern. Banks, in particular, were also warned about KiwiSaver transfers in the regulator’s 2014 review of sales and advice practices.
In other news in the sector, the Kiwibank-owned Kiwi Wealth scheme has filed its new range of documents on the Disclose register – mandatory for all operators under the Financial Markets Conduct Act.
The Kiwi Wealth scheme had more than $2.4 billion under management as at March 31, the documents show.
Also this week, the new Simplicity KiwiSaver scheme has launched in beta-testing mode.
Simplicity, headed by former Tower Investments and Hanover chief, Sam Stubbs, will offer a range of three risk portfolios that invest mainly into index products managed by global passive fund giant, Vanguard. The scheme is also one of the first to adopt the KiwiSaver registry system of Auckland-based fund administrator, MMC.
Structured as a charitable trust, the Simplicity board includes former FMA head of supervision, Kirsty Campbell and Jenene Crossan, head of Flossie, which offers an “app that helps women book hair & beauty services at approved salons via their mobile phone”.
As reported previously by Investment News NZ, ex Citigroup NZ chief, Mark Fitzgerald, and Stubbs are also Simplicity directors.
