I encouraged readers to make some time to think about their KiwiSaver funds as something more than just a deduction line on their pay-slip.
KiwiSaver is a relatively simple financial product but enormously complicated in the detail. Over coming months, I will unpack some of this complexity to help you make the most of your KiwiSaver opportunity.
Lets start with that line on your pay slip. Your contribution comes out of your salary and wages, including bonuses, commission and overtime payments.
It is generally calculated on your gross salary and wages and deducted from the net pay you receive each period.
The minimum contribution you can make is 3%, but you can choose to increase this to 4%, 6%, 8% or 10%.
In most circumstances, your employer will make a contribution too, usually 3% of your salary or wages.
This money is then passed by your employer to the Inland Revenue Department which is the central administrator for KiwiSaver.
By using your IRD number, it matches the contributions received and transfers them to your KiwiSaver provider.
You may have noticed recently by checking your transaction statement with your provider, that this process has sped up significantly and its now easier for you to reconcile what is coming from your pay and arriving in your KiwiSaver account.
If it doesn't reconcile, don't worry, there is another easy step you can do and that is log in to your account at My IR, Inland Revenue’s online service.
If you haven't set up a My IR login, it’s easy to do and worthwhile. From here, you will find information such as which KiwiSaver scheme you are in, whether you are currently on a savings suspension and your contribution information.
Now that you know how much you are putting in and what scheme you are with, how do you find independent information out about that scheme?
Enter Sorted.co.nz. Sorted is independent, impartial, and one of the most trusted brands in New Zealand.
It is a free service powered by the Commission for Financial Capability,the government-funded, independent agency that works to help New Zealanders get ahead financially.
Sorted has a great tool called Fund Finder. Here it takes regulated data the Financial Markets Authority (the regulator) has received from all providers and turns it into something that's easy to use and understand.
Simply click on Check your current fund, type in your scheme name and Sorted will report how your scheme has performed relative to the KiwiSaver market average and also how the fees compare to the average charged.
Armed with this information, jump on to your KiwiSaver provider’s website and look around at the information it has available to you. Is it simple to find? Can you log in and check your balance easily and find which fund you are in? How easy is it to make changes from updating your details through to changing the way your money is invested? Is there a person you can speak to and can you get free advice to support you with your decisions?
With so many New Zealanders in KiwiSaver, it is now a transfer market. Every month thousands of New Zealanders move their account between providers.
It is not hard to do — many providers let you sign up online and you don't need to advise your old scheme.
Transfer times are legislated and individual schemes are monitored on their performance in this area, so you should expect your money to move easily (unless you have changed your name which may mean it can take a little longer).
So remember KiwiSaver is real money and it is your money. That line on your pay slip belongs to you and the decisions you make today about how much you contribute and what fund you choose can make a big difference to the amount that you have available in the future. So take some time this summer to get to Sorted and try its Fund Finder.
- Trish Oakley is Head of Summer (Forsyth Barr’s KiwiSaver scheme). This is not a recommendation to buy or sell any financial product and does not take your personal circumstances into account.
