Kiwisaver: (lack of) investment results explained

Posted byLance Wiggs 2 Comments on Kiwisaver: (lack of) investment results explained

From the Gareth Morgan kiwisaver.com site:

What’s going on with your money?
IRD is holding all contributions made between 1 July 2007 and 1 October 2007. On 1 October 2007, they will transfer the following to KiwiSaver provider schemes:

  • Your contributions
  • Interest on your contributions (at the Commissioner’s rate, currently 6.6% gross)
  • $1,000 kick-start
  • $20 fee subsidy (this represents half of the annual fee subsidy. We are not 100% sure when the second half will be paid.)

From October, the investment strategy team will begin investing the KiwiSaver scheme money and continue to manage the investments.That will explain the lack of investment results then…. It’s a strange way to do things, but rather fortuitous for the IRD in the light of recent market events.

Published by Lance Wiggs

@lancewiggs

2 replies on “Kiwisaver: (lack of) investment results explained”

  1. Lance,
    when you sign up to KiwiSaver (or neglect to opt out if you’ve just started a new job) the IRD hangs onto your money for 3 months. This is so you have time to:
    1 change your mind
    2 choose a scheme provider (other than your workplace preferred or a default scheme).

    The IRD will hang onto your funds for 3 months regardless of when you join- not just until the PIE tax rules come into effect on 1 October.

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  2. I believe the IRD interest rate is tax free. Also, surely the manager of GMI should investigate to find out when the other 1/2 of the fee will be paid as an act of good faith to the members. In fact they should be asking the trustee as issuer to investigate. Sorry, i forgot, the trustee has delegated everything to the manager in this case – including the custody of investments – how responsible is that ? This clearly gives the manager the ability to run off with the assets leaving nothing for the investors. One of the very many things Morgan has been spouting off against in the media and he goes and does it. Why isn’t Morgan squeeky clean. Why has he got the trustee to delegate everything to GMI -questions need to be asked. he’s at it like a rat up a drain pipe – in for the money and clip the ticket where-ever he can.

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