Grandad's photos

Update 2 July - The NZ Herald has an article by Marc Leiberman, boss of ING who launches a stinging attack on Gareth Morgan's views and rightly points out that he is no longer an independent analyst as he is promoting his own Kiwisaver scheme. My view is that all these companies are doing their best to make money from your money. And you don't know when you will be able to get it back.
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I attended the talk by Gareth Morgan which included a lot of info about Kiwisaver, and his own scheme. One of his points was that the financial institutions can charge what fees they like. Another was that there is a very poor regulatory environment in NZ and you can easily lose your money, with no recourse.

I looked at Gareth's scheme in detail and found that they are able to increase their fees from 1% up to 3% of your account balance after 2010. If your account balance was $300,000 that could mean a 3% annual fee of $9000 that you would have to pay.

There is no guarantee of any sort. Some of your investment money will be in the sharemarket which is just a lottery to my mind. NZ's record on insider trading means your money will walk.

You can't withdraw any money (except for a first house, financial hardship, marriage split-up claims or to fund the scheme's administration costs) until you reach the age of Government pension (Superannuation). Currently this is 65. It was 60 until they saw the baby boomers like me coming along and moved it out 5 years. If I could get Govt Super now, I would not need to be driving buses at 4am in the morning. Once the baby boomers are collecting Super, there will be a big incentive for the Government to move the age out more, even up to 70. How would it feel to grow $300,000 for your retirement and be unable to access it when you are 60? Whose money is it?

My recommendation - keep well clear of Kiwisaver. Do make your own retirement fund arrangements, but don't trust financial institutions investment schemes. Retire debts first then invest in appreciating assets (not modern cars or consumer items).