Public option for KiwiSaver to reduce fees would not save KiwiSavers tens of thousands of dollars as claimed by the Green Party, Dunedin-based financial consultant Peter Smith says.
Research company Canstar released a report this week that said KiwiSaver fees were up, despite new disclosure statements.
Since the start of KiwiSaver in 2007, 2.35million New Zealanders had joined the scheme. Canstar general manager Derek Bonner said the annual analysis of KiwiSaver products found while the minimum fee on a standard profile had not changed, maximum and average fees had increased slightly in the past 13 months.
Green Party co-leader Russel Norman said a significant part of KiwiSaver savings was being eaten away by high and rising costs and fees. With a public option, lower costs would save tens of thousands of dollars.
''If these savings are reinvested, KiwiSavers' nest eggs will be significantly higher - up to $142,000 higher in some cases, or $64,000 in today's dollars.''
However, Mr Smith, a principal of the Kepler Group, said the Greens must think the New Zealand Superannuation fund was managed for nothing.
The management of a public fund would cost a lot, as the NZ super fund was outsourced to worldwide experts who did not come cheap, he said.
The average direct fee to KiwiSavers was $2 a month, or $24 a year, to make a maximum direct cost of $1080 over 45 years.
''Manager expense ratios have been reducing all the time and we, as advisers, have been squeezed to the point there are no such things as trailing fees or brokerage on KiwiSaver. Some advisers charge a fee for service but many do not.
''I doubt if any fund manager is making much money directly from KiwiSaver. Their non-KiwiSaver funds will be keeping them solvent.''
The funds had to be managed and current manager expense ratios generally ranged from 0.5% to 1.15%, Mr Smith said.
From that, the manager had to pay staff, meet regulations and investigate companies. The total funds at present in KiwiSaver of $20 billion at 0.5% was just $100 million to be shared among about 14 providers.
There could be more, but only 14 providers subscribed to the Canstar survey, he said.
