Conservative KiwiSavers who have invested in the likes of AMP, AXA and Tower and who may be considering moving their money into bank-run funds to get the new Government guarantee should wait, Treasury says.
The Reserve Bank's website last night seemed to be saying that only certain ultraconservative KiwiSaver funds that invest in government bonds, bank bonds and the like will be covered by the guarantee scheme.
Funds run by providers that were not banks or finance companies would be excluded, at least initially.
Experts have called this unfair.
"All KiwiSaver schemes must comply with the same regulatory oversight," Michael Littlewood, of the University of Auckland's Retirement Policy and Research Centre, said.
"So there is no justification for allowing bank-promoted schemes a marketing advantage over other schemes."
However, the head of a major non-bank KiwiSaver provider seems confident the situation will change.
"We're in discussions with the Reserve Bank on these sorts of issues," he said on condition he not be named.
"Our understanding is we would be covered, but the process may take some time."
Treasury spokeswoman Chris Major said: "It's not our intent to stop non-banks or non-finance companies, that are eligible in every other way, from being covered by the guarantee."
Under the rules listed on the Reserve Bank website, "collective investment schemes" - which include many KiwiSaver funds, PIEs (portfolio investment entities), and other unit trusts and super schemes - will be covered if the following apply: Their investments are confined to government securities or debt securities issued by banks and finance companies that are covered by the Government guarantee.
They don't increase their investments in non-banks beyond the level that existed on October 12.
This is to prevent funds from moving money out of banks and into covered finance companies, which tend to pay higher interest.
This would seem to cover many ultraconservative KiwiSaver funds.
But the site also said last night: "Who will be covered by the guarantee? Applications are initially invited from businesses that meet all the following criteria:" And the first criterion is: "Issue debt securities to the public."
AMP, AXA and Tower, and many other KiwiSaver providers, don't issue such securities.
