KiwiSaver default provider system slammed

In the Retirement Policy Research Centre's latest PensionCommentary, co-director Michael Littlewood has questioned the need to renew the agreements with the six default KiwiSaver providers in 2014, when their current deals are up for renewal.

By then, most New Zealand employees will be KiwiSaver members and auto-enrolment will be unnecessary, he said.

However, "...if auto-enrolment continues to be a feature of KiwiSaver, there needs to be some kind of default provider regime. A default investment option is also needed because employees who are auto-enrolled will, by definition, have made no decision about how their savings are to be invested."

Littlewood said the Government "should not give a commercial and marketing advantage to a small group of financial service providers, especially if they do not pay for the privilege."