Looking Beyond Default Schemes

No one has to join KiwiSaver. But if you’re 18 or over and start a new job, generally you’ll be automatically enrolled in KiwiSaver. And while that’s a good thing, it comes with a few dangers. Typically you will be enrolled with a default provider into a default fund. Default providers and funds are allocated to people who do not actively choose a fund when they join KiwiSaver.

While that gets people started the danger with this is that default funds were designed as a ‘parking space’ to put you until you got qualified advice and could make a better informed choice for yourself. Unfortunately few employers advise their new employees of this.

While there are changes coming later this year, over 700,000 people currently remain in default schemes, more than half of whom have not made an active decision to remain in their default scheme. Most may not even realise they are in a default scheme! If like many of my clients you don’t know who your provider is, or the type of fund you are in, chances are you’re in a default fund with a default provider.

There are also 20 other providers outside the 9 current default providers, many of whom are out-performing the market average for returns.

So there are very good reasons to look beyond the default options many people find themselves in.

If you would like to know more about how KiwiSaver works and the choices you should be taking control of, feel free to message us to book a KiwiSaver Tutorial. 100% free and no obligation to make any changes if you don’t see a reason to.