Commerce Minister Simon Power announced on Wednesday night that the Government would make changes to improve the governance and management of KiwiSaver schemes.
It had become clear that the regulatory regime around KiwiSaver, in which more than one million New Zealanders had invested nearly $5 billion, needed improvement.
"Mum and dad investors need to be certain that KiwiSaver is well governed and that those managing their hard-earned savings will be held accountable if there is wrong-doing," Mr Power said.
Mr Foster said the changes would place duties on fund managers of retail KiwiSaver schemes to act in the best interests of investors and make them primarily responsible for the accuracy of their prospectus and investment statement.
KiwiSaver was not government guaranteed and the most common question from investors was why not?
People wanted to be sure about their money. The Government "chipped in" and offered incentives but their investment was just that - an investment, he said.
Most KiwiSaver providers would already be operating under the changes proposed by Mr Power but in a best-practice way, rather than by regulation, Mr Foster said.
The changes would ensure trustees were responsible for supervising managers and making sure they complied with trust deeds and their other responsibilities. Trustees would also be supervised by the Financial Markets Authority, which would become the new securities market regulator.
Managers would have to regularly provide information to the public and regulators regarding their performance, fees and what they had invested in. That would make it easier for investors to compare performance between providers, he said.
Mr Power said that sort of information was provided to the regulator of the six default funds and he could see no reason why non-default funds should be subject to different reporting requirements.
Investors were entitled to expect KiwiSaver to be well regulated and transparent, he said.
