In terms of a retirement savings method, Kiwsaver is still young – set up in July 2007. The good news though is that plenty of us are jumping on board; as of June 2014 there were 2.35 million members of the scheme. With the population of New Zealand currently sitting at more than 4.5 million, that’s an impressive 52% of the population (compared to 33% in 2010).
How does it work?
It’s easy! Eligible workers can elect to contribute a percentage of their salary (either 3%, 4% or 8%) and employers also contribute at least 3% of their gross salary.
Those entering the scheme for the first time receive a $1,000 tax-free “kick start” from the government, paid straight into the new KiwiSaver account.
While saving for retirement is the primary focus, first home buyers can also delve into their fund to help with their first property purchase, as long as they have been contributing for at least three years. There’s plenty more information on the government’s Kiwisaver site, here.
Not all schemes are equal.
Not all schemes are created equal though; workers need to keep a close eye on both return and fees – not to mention features. Fortunately CANSTAR helps to make the assessment easy by researching and rating a large proportion of the available Kiwisaver offerings. This year we have assessed 49 products from 28 providers on both price and features, to determine which ones offer outstanding value for money.
Among the small and select group of five-star winners is ASB, with five-star ratings in both the Balanced and Growth profiles. ASB’s administration, trustee and expense fees are captured by one simple management fee, which is highly competitive against its peers. In terms of features, ASB provides members with the convenience of a full online application and a mobile app to easily check fund balances. ASB also offers detailed educational material through its website and YouTube videos, which highlight KiwiSaver-specific information such as the importance of contributions and understanding relevant market information.
For more information on CANSTAR’s KiwiSaver assessment, you can download our report here.