Changes needed

Change all the default fund options to balanced, not conservative fund types. Ensure IRD provides default fund managers with correct member tax rates for all default members.

Progressively remove all members still in a default fund after 12 months by switching them out.

Establish a whitelabelled government balanced fund into which all longerterm default members are switched.

Stop new default member flows to any default fund provider that does not adequately meet specified engagement and switchout rates for default members. Instruct the whitelabelled government balanced fund to minimise investments in Australianowned bank securities.

Require default fund providers to keep default KiwiSaver funds separate from other funds, to not use the word ‘‘default’’ in the name of any other fund they operate and to switch ‘‘active choice’’ members out of their default fund.

Investigate KiwiSaver fund managers that have significant conflicts of interest in security selection or in the way they determine what fund types to recommend to members.

Require default fund managers to refund management fees charged in relation to placing and keeping investments in their own issued securities.

Require explicit identification and ongoing disclosure of such conflicts to fund members.