KiwiSaver: 10 years old and growing
KiwiSaver is 10 years old. How’s your first KiwiSaver decade been? Has it lived up to expectations? I can tell you, as a KiwiSaver provider, our expectations have been blown out of the water, as have those of the Government and Treasury. New Zealand’s retirement savings scheme has been embraced by far more Kiwis than ever imagined, with KiwiSaver members amassing more than $41 billion in retirement savings to date.
In the Fisher Funds KiwiSaver schemes alone, we’ve earned more than $1b (after fees) for our members.
I remember having reservations when KiwiSaver was first mooted. While Australian superannuation was very successful, I wasn’t convinced Kiwis would embrace such a savings scheme.
As savers and investors, we tended to be somewhat conservative and preferred houses and bank deposits over managed funds and share market investments.
Still, the Government ensured there were enough features to make joining KiwiSaver virtually a nobrainer. To quote a Sunday StarTimes article from April 2007: “Who should open a KiwiSaver account? markets over time.”
This article was prescient; I have spoken to many KiwiSaver members over the years who’ve benefited from the $1000 kickstart (unfortunately no longer available), the home deposit boost, the employer contributions and the ability to learn while they earned.
More than that, they’ve become accustomed to a portion of their earnings being diverted into a longterm savings scheme they can’t access. KiwiSaver has helped a lot of people become committed savers, when they may not otherwise have been.
Judging from the questions and conversations we enjoy today — compared to 10 years ago — a lot of people have learned about financial markets and money concepts, which sets them up well for their future in KiwiSaver and beyond.
Not everything introduced in the past 10 years has added to our lives. In fact, there are multiple temptations today to lure us away from our long term savings goals.
But KiwiSaver is doing its job well. We talk to happy KiwiSaver members every day. Let me tell you, that enthusiasm is relatively rare in the staid financial services industry.
Happy 10th birthday KiwiSaver; you’re doing well.