A number of simple steps could dramatically improve the financial wellbeing of KiwiSaver members if there was industry collaboration to implement them, investor education workshops have been told.
At IRD’s annual KiwiSaver day this year it is holding a workshop to discuss possible administrative tweaks to the KiwiSaver system.
As part of the Commission for Financial Capability’s summit this month, workshops involving KiwiSaver providers, IRD, the Ministry for Business Innovation and Employment and financial advisers discussed the value of investor education and what more could be done to improve outcomes for New Zealand savers.
That feedback will be collated and delivered to the IRD workshop on August 10.
A number of top priority initiatives were determined.
They included ensuring savers were in the right choice of fund, making it clear what benefit extra contributions could have and the cost of a contribution holiday, showing on annual statements the income a lump sum would translate to, and understanding key concepts such as compound interest and risk and reward.
The workshops said there were still a number of gaps in investor education resources. Participants said many members still did not understand KiwiSaver is not Government guaranteed, many did not understand the different investment types and there needed to be work to get savers making better use of resources.
Those who participated in the workshops are now being asked to share the outcomes with their colleagues and staff and pick the top three initiatives that they think would make the most material change to KiwiSaver members.
Commission group manager of investor education David Boyle said the aim was to realistically determine what could be done.
He said much of what had been suggested was the type of change that needed to be adopted industry-wide and could not be implemented by one individual group working alone.
“If we are serious about changing New Zealanders’ financial wellbeing, the biggest component of that is KiwiSaver, if we can find two or three things other than the member tax credit to do at a certain time or in a certain way and all do it the same way it cuts through the noise of life. It’s tough enough getting people to top up their account to get the [full member tax credit], let alone working out whether they are in the right fund or what income they need in retirement. But that doesn’t mean we shouldn’t try to do it.”