KiwiSaver provider Juno have announced that following an internal review, the company will be increasing their fees for some members.

The review focused on key areas for cost for the business arising from their active investment approach, current member base, as well as new initiatives that they are set to announce.

Despite the increase, a statement from Juno says that their KiwiSaver will remain at a competitively lower rate compared to industry standards. “The average Juno fee for balances $0-400k is 0.65%, for balances $0-200k is 0.77% and for balances $0-50k is 0.72%. This contrasts to Morningstar data showing the average asset-based fees for KiwiSaver growth funds as 1.06%.

“A recent FMA-commissioned work shows we are true-to-label active; all three Juno funds topped their respective Morningstar categories for the year to September 30, 2020.”

Juno has stated that given their current mix of balances, many members will see little to no price increase. Under 13s are still free and members with balances between $5-$15k still pay $5 per month. Nearly half of Juno members will still be paying less than $100 annually in total.

The fee change will come into effect for customers on December 1, 2020.

The other big announcement from the KiwiSaver provider is that Juno will not be seeking default provider status.

Its statement said: “We have reviewed the request for proposal (RFP) documents and requirements carefully. We are confident our fee structure would be very competitive and offer compelling value in terms of performance and other member benefits. But relative to criteria, we don’t have a long KiwiSaver track record and none at scale. We fully understand the Government’s need to manage the financial and political risk of a provider struggling – or failing – to manage a potentially large number of new default members.

“We’ve decided instead to continue building focus on attracting members aligned to our value proposition from other schemes, at which we have been increasingly successful (including default members making an active choice to join us). We expect to keep attracting New Zealanders new to KiwiSaver.”