After an extensive review of the current KiwiSaver default providers, the government announced some major changes to the default KiwiSaver scheme, including reducing the number of providers from nine to six.
Of the original nine, Booster was excited to be one of the existing default providers to be reappointed for another term.
Five of the existing providers, including major New Zealand banks lost their status as a default provider, and two newcomers were added to the list. The changes will come into effect 1 December 2021.
Our reappointment as a default provider is testament to our credibility in the KiwiSaver space, and the confidence and trust the government has in Booster to continue providing excellent service and outcomes for its KiwiSaver members for the next seven years, and beyond.
Why was Booster chosen?
Every seven years, the government reviews the settings for default providers ahead of appointing a new set of providers through a competitive tender process. The government selected six default providers through that process, on the advice of an independent panel.
Commerce and Consumer Affairs Minister David Clark said, “The six default providers were selected because they offer the best value for money for their members in terms of lower fees and higher levels of service.”
Proven track record
A key focus for the tender process was to show how we’d look after members on their journey with KiwiSaver. We were able to show our commitment to our members with a proven track record of consistently high active choice engagement rates, good value for money and wraparound customer service.
Active choice engagement rates
Across the industry, we’ve continually had one of the highest engagement rates in helping default members make an active choice with their KiwiSaver investment fund. In 2020, our engagement rate was 16%, in comparison to other default providers with engagement rates as low as 6 or 7%.
Good value for money
One of the key changes to the default fund is that the profile will change from conservative to balanced. This change increases the likelihood of higher returns over the long term.
And, from 1 December 2021, default members enrolled in the Booster KiwiSaver Scheme default fund will pay a lower management fee and no monthly member fee.
We’ll also continue to contact our default members on a regular basis to encourage them to review their fund choice. Default members can choose to switch funds online or schedule a call with one of our Booster advisers for help in choosing the right investment fund for their savings goals.
Wrap around customer service
Our ability to continually innovate and evolve our products and services means we’re able to support our members at every stage of their financial lives.
Our online portal, mybooster, enables members to take control of their Booster account and financial future. Members can check their KiwiSaver account balance, set up direct debits, update their PIR rate, download annual statements and first-home buyer documentation. They can also access Booster’s free online budgeting and planning tools, mybudgetpal and mymoneymap. Members can also download the Booster NZ app, so they can keep on top of their money – on the go.
And, because we’re based in Wellington, our customer care team offers help over the phone, via email or over webchat.
Fossil fuel and illegal weapons exclusions
One of the new requirements for default providers is for their default fund to exclude investments in fossil fuels and illegal weapons. Booster is already a leader in the ethical investment space, offering three socially responsible investment funds for KiwiSaver members. Booster was also the first KiwiSaver scheme provider to offer certified socially responsible investment funds for KiwiSaver members.
All of Booster’s core KiwiSaver and investment funds follow a responsible investment approach, avoiding investments in:
- Controversial weapons production, manufacturing, distribution and supply;
- Nuclear weapons manufacturing
- Nuclear weapons auxiliary services
- Military-style semi-automatic weapons and assault rifles and companies materially involved in their supply; and
Booster’s socially responsible investment (SRI) funds go one step further, screening out investments across a wider range of areas.
Looking forward
Our reappointment as a default provider – one of only four current default providers to be reappointed – is a great endorsement to our capability and proven track record during the current term.
We’re proud of the work we do to help New Zealanders save for their best financial future. We’re looking forward to continuing this work and helping even more Kiwis achieve their financial goals.
