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From the Press (NZ Herald)

Tamsyn Parker: KiwiSaver - how it looks a year on
Tuesday Sep 30, 2008

Today marks one year of investment for KiwiSaver funds. Fund managers got their hands on the first allocation of money from savers on October 1 last year. It's likely that the performance of many will be negative given the massive fall in both the local and global sharemarkets during that time.

But investors should remember superannuation savings are long-term investments and most people will have plenty of time for their fund to recover before they get access to the money. There is also the fact that much of money is coming from the Government's coffers rather than our own pockets.

BY NUMBERS

Some interesting statistics have come out of the Government Actuary's office on KiwiSaver's first year.

As of June 30, 54 schemes were registered, 22 of which registered in the year to June 30 (the others had already registered before the launch of KiwiSaver.)

In the year to March 31 $722 million was invested in KiwiSaver schemes, of which $7.3 million was lost on investment. Just over $30,000 was withdrawn because of the death of the scheme member while nearly $3000 was taken out by people who suffered from financial hardship.

Of the 494,093 members most were new, although 630 transferred in from other superannuation schemes. Just over 63,000 were non-contributing members, presumably because they are children. Of those 161,391 were automatically defaulted into a scheme when they moved jobs - the highest number of those were in the 18-to-25-year category at 41,659 - more than double other age-groups, showing most of those in the younger category have come into KiwiSaver via the automatic enrolment process rather than through actively signing up. The nine biggest KiwiSaver schemes have $25 million or more each invested in them with 383,387 investors. But 13 schemes have less than $0.5 million each, raising the question of how long these schemes will last with such a small amount invested.

BEING PICKY

Some investors have also shown themselves to be very picky. Three investors in the year to March 31 had made more than five switches in their KiwiSaver fund while eight people had made more than four and 10 people had made more than three. More than 100 people had made more than two switches.

NO COMPARISON

One frustrating thing about KiwiSaver is that there is still no one place investors can go to to compare the performance of their funds. NZX-owned fund research and ratings firm FundSource has said it will look at it in the future, as has main competitor Morningstar - but so far no one has come up with the goods.

Some market commentators have downplayed the need for investors to be able to compare funds, saying it would encourage investors to chase last year's performers and compare funds that are very different, creating an apples versus pears situation.