People enrolled in KiwiSaver will soon be able to see their future balances in their annual statements.
This will help them work out how much they’ll have saved to live on when they retire.
This follows a move in April to also show the dollar amount paid in fees on statements.
“We want people to have access to clear, easy-to-understand information that shows how their current savings are tracking towards retirement,” Faafoi says.
“Statements will show people an estimate of the savings they will have built up by age 65 and the weekly retirement income that sum would provide over 25 years.”
Faafoi says the changes to statements will only happen after consultation with providers, but are expected “to be introduced without delay”.
It’s the second major change to KiwiSaver statements lately. The first was that, since April 1 this year, KiwiSaver members have been able to see the fees they pay their fund managers in dollar figures for the first time.
For example, if a customer has a balance of NZ$10,000 in their KiwiSaver account, until now they might have seen the fund manager’s fee expressed as 1.28 per cent. That will now be spelled out as $128 a year, the Financial Markets Authority said in a press release at the time.
But it’s important not to freak out when you see the dollar figure.
David Boyle, education group manager of the Commission for Financial Capability, says you shouldn’t change funds or providers solely because of how much they charge in fees.
First, it’s worth comparing funds on Sorted’s Fund Finder, to see how other funds fare across Defensive, Conservative, Balanced, Growth and Aggressive funds.
“Some fund managers charge more, but you get a better return overall,” says Boyle in a press release.
The changes are part of the government’s efforts to improve the transparency of reporting for KiwiSaver members.
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First published 18 June, 2018
Story by Claire Connell
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