10 Mar 2010

Hands-off KiwiSaver approach criticised

9:24 pm on 10 March 2010

The hands-off approach by many KiwiSaver members has led to complacency and poor performance by fund managers, say some in the financial sector.

A UMR national poll indicates only 15% of members understand there is no government guarantee if their KiwiSaver provider fails.

Just under half of members believed the Government would pay out and nearly 40% were unsure.

Michael Chamberlain, principal of KiwiSaver scheme SuperLife, says many KiwiSavers are automatically enrolled with a default provider and pay little attention to where their money is going.

Mr Chamberlain says the lack of scrutiny and competition is dangerous because it allows slack fund managers to get away with poor standards of performance.