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Am I in the best scheme for me?
Q.           I joined KiwiSaver in 2007 and am in the AMP default fund.  I don’t find their statements very helpful and I don’t get them very often either.  Is this the best fund for me?  I am nearly 64 and have close to $62,000 in my fund.
A.         You were allocated to the AMP default fund randomly by Inland Revenue when you first joined KiwiSaver. Back in 2007 there were 6 default schemes (reduced to 5 when AMP took over AXA last year) and while they are all conservative, they are all managed somewhat differently according to each fund manager’s style and strategy. AMP regards their default fund as a ‘holding pen’ until members make an active choice according to their age and risk profile. Expecting members to move out of the default fund, they have a large weighting to cash – currently 49%. As you probably know, returns on cash have been low for several years, so it may come as no surprise that the performance of this default fund has lagged its peers.  Average returns over 5 years to 31 December were 3.14% compared with 4.18% for all funds of this type (refer Sorted’s FundFinder). AMP actually runs a conservative fund as well, but it is about a billion dollars smaller than their default fund so it looks like most investors have yet to make up their minds about where they should be invested.
I am sure you are happy to have saved a significant sum through KiwiSaver, and up until recently the Government top ups and employer contributions will have added far more value than you have lost by being in a somewhat dawdling fund. But 1% on $62,000 is now more than you are getting in Member Tax Credits, so unless you plan to cash up at age 65 it would be worth a review.

Fund managers are required to provide an annual statement to investors. If you find your statement difficult to follow, get on the phone and tell them. You should not be in the dark about your KiwiSaver account. If you can log in to your account, you can check all transactions and your current balance. The Inland Revenue “My IR” login is also a useful source of information for working people as it tracks all contributions as well as all Government top ups.

Sorted’s FundFinder calculator gives fund managers a service rating depending on what they offer their investors. This includes help with investment options such as online calculators, information on the provider’s website for people at different life stages or with different attitudes towards risk;communications to members, flexibility on how they receive fund balances and other information, call centre availability and newsletters as well as extra services such as help with maximising tax credits, help with transferring Australian super and advice before and during retirement. 

Level of service and education is becoming more important as fund balances increase. The Government has reviewed the present line up of default managers, and from 1 July 2014 there will be 9 default schemes with Grosvenor, KiwiBank, Westpac and BNZ joining AMP, ASB, ANZ, Mercer and Fisher Funds (which took over Tower).   In its announcement, the Ministry of Business, Innovation & Employment stated: “The default providers have to deliver member education in the form of investment information to inform and educate default members on their KiwiSaver Scheme as a whole, as well as helping them make appropriate investment choices for their individual circumstances.”
Shelley Hanna is an Authorised Financial Adviser FSP12241. Her disclosure statement is available on request and free of charge by calling 870 3838. The information contained in this article is of a general nature and is not intended to provide personalised advice. Send your KiwiSaver questions to