Fletcher Tabuteau, New Zealand First Deputy Leader
New Zealand First Deputy Leader and spokesperson for commerce Fletcher Tabuteau is pleased to announce the Government has taken seriously the issues raised by his KiwiFund Bill meaning the Bill will not be progressed further.
“Simply, the issues the Bill raises will be investigated in other ways, so it has been withdrawn,” Fletcher Tabuteau said.
“The Government will now look into a number of matters of concern in two upcoming reviews so there is no need for a working group to be established under the Bill.
The Government will investigate fees and investment practices through the Review of KiwiSaver Default Provider Arrangements and will ask the Retirement Commissioner to consider KiwiSaver fees and investment practices in the 2019 Review of Retirement Income Policies.
“The default provider review is the Government’s key lever in influencing fee levels among default providers, and changes among default providers will have flow-on effects in the wider market,” Fletcher Tabuteau said.
“Ministers Kris Faafoi and Grant Robertson have asked me to be involved in the preparatory work on the review, and I look forward to collaborating with Ministers during the review as we work through this important task.
“We are also interested in the Retirement Commissioner’s further thoughts on how to raise the profile of the important issue of KiwiSaver fees, so we will be continuing work on that.
“Total fees to managers of default funds rose from a total of about $21 million in 2012 to about $31 million in 2017. Many New Zealanders remain in default funds because they have not made an active choice about which KiwiSaver fund they wish to be in, so decisions about default funds affect a large number of people.
“The KiwiFund Bill brought to the surface a lot of issues that needed to be urgently addressed, and I am pleased these will be put under the microscope,” Fletcher Tabuteau said.
Note to editors
Link to final report from Economic Development, Science and Innovation Committee
Review of KiwiSaver Default Provider Arrangements
- The Minister of Finance and Minister of Commerce and Consumer Affairs set the appointment process for default funds and decide on the appointment criteria, subject to consulting the Financial Markets Authority and obtaining Cabinet approval.
- The existing nine default providers were appointed for seven years on 1 July 2014, expiring30 June 2021.
- The Minister of Finance and Minister of Commerce and Consumer Affairs set the appointment process for default funds and decide on the appointment criteria.
- As at June 2017, 1.1 million of the current 2.8 million KiwiSaver members entered KiwiSaver through allocation to a default provider. Around 450,000 people (16% the 2.8 million total) remain as default members.
Retirement Commissioner’s 2019 Review of Retirement Income Policies
- The Retirement Commissioner is required to review the Government’s retirement income policies every three years.
- The terms of reference for the next review will be set by the Minister of Commerce and Consumer Affairs by December this year, and the next review is due at the end of 2019.
- The review results in non-binding recommendations to the Government.