Kiwisaver fund members are being urged to check the state of their savings and make a decision early this year whether their current plan is the best one available for their long-term plan.
Forsyth Barr savings specialist Damian Foster said in an interview that too many savers had used the "set and forget" approach to their savings.
The latest IRD figures showed that more than 1.2 million people were in KiwiSaver and a third of them were under 25, he said. However, nearly 50% of members were invested into conservative funds, with just 18% in growth funds.
Growth funds were an option for younger members of KiwiSaver, Mr Foster said. Many younger savers had been put into conservative funds by default and had not made the change.
Transfers between KiwiSaver providers nearly tripled in the year to June 2009. "This is a step in the right direction and we expect to see further increases this year."
The Government would issue a new tender for default providers in 2014, giving KiwiSaver providers the opportunity to apply for default status.
When that occurred, the task force was pushing to have the investment mandates changed for default providers, getting away from the conservative funds currently seen, Mr Foster said. That change would add more balance to reflect the longer term nature of the investment.
"We see the 2014 tender as a positive step for KiwiSaver members, both through increased competition and through a more suitable investment mandate for those who don't actively choose a fund."
Recommendations:
- Check your latest KiwiSaver balance with your provider
- Check which fund you are invested in and whether it is the right one for you
- Keep an eye on fees and make sure they are fair and reasonable
