KiwiSaver annual statements are being read but not acted upon
Most KiwiSaver members are reading their annual statements but only a quarter of them check to see if they’re on track
to meet their retirement income goals.
The Financial Markets Authority has today released the results of a survey conducted in May this year, to coincide with the time when most KiwiSaver investors are receiving their annual
statements. The survey was responded to by 1,313 KiwiSaver investors, two thirds of the total sample.
According to the survey, 21% of members had read their KiwiSaver statement thoroughly, and 58% had briefly looked at it.
However, only 23% of members reported having checked to see if their KiwiSaver account was on track.
Paul Gregory, FMA director of external communications and investor capability, said that the annual statement should be
an important trigger for members to think about what they are saving and investing for. “When this arrives through your
letterbox, or in your email, it’s a great opportunity to check in with your goals. And, if you’re not happy, to check in
with your KiwiSaver provider. When you look at your statement, ask yourself some important questions:
• Do I know the income I’d like to have in retirement, and the number I need to get to?
• Given my current contributions and what fund I’m invested in, am I on track to hit that final number?
• If I’m not on track, what’s in the way? Am I contributing enough? Am I paying too much in fees? Are the returns I
expected not being delivered? Are my goals actually reasonable? Is it some or all of the above?
David Boyle from the Commission for Financial Capability (CFFC) said, “It’s a pleasant surprise that so many people are
reading their statements. But it’s clear from this survey, and from CFFC’s own work, that more could be done to make
these documents of greater use to KiwiSaver members. We’re also concerned that 73% haven’t checked they are on track for
their retirement needs.”
The FMA’s survey results strongly suggest what additional information on the statements might assist more KiwiSaver
investors to use the document as a decision-making tool:
• 72% of respondents said they would like to see information about the lump sum they were on course to receive when they
retired;
• 62% said they would like to see what weekly income that lump sum would deliver in retirement as they drew it down; and
• 37% said they would like to see the fees they paid expressed in a dollar amount, echoing a recent survey by the
Commission for Financial Capability (CFFC) where the positive response was even stronger.
Currently providers are not required to disclose this information above.
KiwiSaver providers must send out an annual statement to all their members in the three months following the end of the
financial tax year. The statement is a mandatory disclosure document, along with the product disclosure statement and
the fund fact sheet.
The Ministry of Business Innovation and Employment is currently working with the FMA and the CFFC to review the format
and content of the KiwiSaver annual statement to consider ways to improve the information provided. The results of the
survey will be taken into account.
For more information about how to make better decisions about your investments: www.fma.govt.nz/consumers
Full survey here
TABLE - Summary of survey results:
Have you read your statement?- 21% - have read it thoroughly
- 58% - have briefly looked at it
- 8% - have not received it
- 4% - intend to read it
- 9% - hadn’t read itHave you checked if your KiwiSaver is on track to produce the income they are planning for in retirement?- 23% - Yes
- 73% - NoWhat information was most useful?- 93% - the current balance
- 89% - contributions
- 81% - investment gains or losses
- 81% - tax paid
- 78% - feesWhat additional information would you like to see?- 72% - retirement lump sum
- 62% - weekly income from the lump sum
- 37% - fees shown in a dollar amountWhat is most likely to prompt you to make changes to your KiwiSaver?- 46% - fees seem high
- 36% - my fund lost money
- 36% - another provider achieved better returns.
ENDS