Whaleoil opposes the Green's idea of creating a single default government run Kiwisaver scheme. He feels that it is pointless to replicate the work of the private sector.
And he has a point, if it is not broken why fix it.
Well there is something broken with the current model. Profit.
Each one of the default schemes is out to make a profit (no harm in that they are not charities) but that profit reduces the amount of money available to the investor. Since most members are invested for decades the lower the fees they pay the more they will get back.
I recall getting a statement from IrishLife setting out the fees I would pay on my investment (a PRSA) with them and noted that after nearly 40 years they were enormous.
My recommendation is that when the current default contract runs out in 2014, the Government would set up a default Kiwisaver scheme modelled on the current NZ Superfund. Any other non profit scheme could join this arrangement and thus provide options for the public.
And he has a point, if it is not broken why fix it.
Well there is something broken with the current model. Profit.
Each one of the default schemes is out to make a profit (no harm in that they are not charities) but that profit reduces the amount of money available to the investor. Since most members are invested for decades the lower the fees they pay the more they will get back.
I recall getting a statement from IrishLife setting out the fees I would pay on my investment (a PRSA) with them and noted that after nearly 40 years they were enormous.
My recommendation is that when the current default contract runs out in 2014, the Government would set up a default Kiwisaver scheme modelled on the current NZ Superfund. Any other non profit scheme could join this arrangement and thus provide options for the public.
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