Officials cut advisers from KiwiSaver

The government did not take up a late proposal that the KiwiSaver Bill include a direction that savers seek financial advice.

Thursday, April 6th 2006, 6:34AM

by Rob Hosking

There is a possibility changes along those lines will be made in the select committee stages – but officials have also advised there is little room for changes at that level.

Documents obtained under the Official Information Act show the Securities Commission and Ministry of Economic Development suggested the information pack which will be supplied to employees include suggestion the employee “seek advice” and that this be included in the part of the bill relating to information provided to employees.

An emailed reply from officials says this is unlikely to be adopted. There were concerns about the timing – the suggestion came just two weeks before the bill was presented to Pparliament – but, more significantly, “we have some doubts that our minister would agree...especially as it might raise an argument that the government should fund this advice.

“It is our view that it is something that could be better considered as part of the select committee process.”

That appears to be in line with previous comments by Revenue Minister Peter Dunne, who recently told a Financial Planners and Insurance Advisers Association meeting that he expects the issue of financial advice to be one of the major issues taken up by the select committee.

Yet the same set of documents also indicate a reluctance to change very much at the select committee stage – and also give ammunition to those who say the KiwiSaver process is being rushed.

“We need to minimise as many changes to the scheme during the passage of the legislation as possible, particularly those that may impact on the viability of being a default provider,” says one report to ministers late last year.

Selection for default providers for the scheme has already started, despite the bill still being some way from becoming law.

Rob Hosking is a Wellington-based freelance writer specialising in political, economic and IT related issues.

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