KiwiSaver default providers Q&As

Thursday, December 7th 2006, 12:46PM

How did you choose the default providers?
An open competitive tender process was undertaken to select the companies to be appointed as default providers, where Ministers were assisted by advice from independent external experts who carried out detailed evaluation of potential providers.

The companies to be appointed as default providers are required to meet stringent criteria so as to ensure that they are able to offer the kinds of retirement savings options New Zealanders want and need.

What criteria were used?
The default providers have been selected on a number of criteria, including their:

Security and organisational credibility;
Organisational capability;
Proposed design of the providers Default KiwiSaver Scheme;
Administration capability;
Competitive fee levels; and
Investment capacity/capability.

Do people have to join a default provider KiwiSaver scheme?
No, people do not have to join a default provider KiwiSaver scheme.

Employees starting a new job on or after 1 July 2007 will be automatically enrolled in KiwiSaver with the ability to opt-out. Those employees who do not opt out will be allocated to a KiwiSaver scheme in one of three ways:

the member can actively choose a KiwiSaver scheme; or
if no KiwiSaver scheme is chosen by the member, then they will be allocated to their employer's preferred KiwiSaver Scheme if they have one; or
if the employer has not chosen a preferred KiwiSaver Scheme, then the member will be automatically allocated to a default KiwiSaver scheme by Inland Revenue.

All KiwiSaver schemes will be run by the private sector regulated similarly to existing registered superannuation schemes and governed by trust deeds. Any provider, not just default providers, will be able to offer KiwiSaver schemes that meet the requirements of the KiwiSaver Act.

Are default providers better than other KiwiSaver scheme providers?
The companies to be appointed as default providers were selected from amongst those who submitted a formal proposal in the competitive tender process and subsequently went through a detailed evaluation process. Any provider, not just default providers, will be able to offer KiwiSaver schemes that meet the requirements of the KiwiSaver Act and not all potential providers of KiwiSaver schemes will have chosen to seek selection as default providers.

The range of products offered by other KiwiSaver schemes may differ from those offered by default providers. Members will be able to actively choose a KiwiSaver scheme that best meets their specific needs.

« KiwiSaver default providers selected

KiwiSaver default scheme providers announced »

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