AMP answers Gareth Morgan on KiwiSaver
"Gareth Morgan‘s attack on the financial services industry in last week‘s Sunday Star-Times does nothing to help New Zealanders understand the issues."
If there were a sign on a beach saying "Sharks in the water" you can be pretty sure the number of people who‘d venture into the water would be small. No matter that a shark may not have been spotted for over 20 years or indeed there may never have been a shark spotted at all.
And so it is with KiwiSaver. Gareth Morgan‘s attack on the financial services industry in last week‘s Sunday Star-Times does nothing to help New Zealanders understand the types of issues they should consider when deciding whether or not to join KiwiSaver nor the factors to consider when choosing a provider. Morgan‘s stance may simply scare people away from KiwiSaver.
Morgan made a series of unsubstantiated claims designed to undermine the integrity and intent of other companies who plan to offer a KiwiSaver product. It looks like a series of half-truths, mis-truths and speculation designed to enhance Morgan‘s own position as someone who also plans to be a KiwiSaver provider. Indeed some of the claims made are so serious that if Gareth Morgan has any supporting evidence whatsoever, he should take that evidence to the Securities Commission without delay. KiwiSaver has been designed to encourage New Zealanders to save. The fees charged on all KiwiSaver schemes must be reviewed by the Government Actuary. And people who choose to join a default KiwiSaver scheme have the added comfort of knowing that their scheme has been through a rigorous approval process by the Ministry of Economic Development.
For the first time in a generation, from 1 July 2007, KiwiSaver will provide a framework and some modest encouragement to help New Zealanders achieve a retirement income better than the basic standard of living provided by New Zealand Superannuation. Savers will have an ownership stake in our own and global productive assets and deeper local investment markets will provide capital for Kiwis with ideas to develop. With KiwiSaver, the government has established a pain-free way for contributions to be made from salary for all employees. Employers can be involved as little or as much as they want.
Along the way there is the opportunity for some significant benefits including first home purchase subsidies and no tax being deducted from employer contributions on up to 4% of salary or wages.
There will be plenty of consumer choice for KiwiSaver, both between schemes and investment choice within schemes. There are six default KiwiSaver providers and many other fund managers, including Gareth Morgan Investments, that have announced that they will offer KiwiSaver schemes. Savers will be able to transfer freely between KiwiSaver schemes and can only be winners from the vibrant and competitive KiwiSaver market. Savers will be able to decide whether Gareth Morgan Investments‘ or AMP‘s (or any other provider‘s for that matter) offering best suits them.
We‘re all in favour of robust competition but baseless scare mongering in the service of self- promotion is not in the best interests of anyone, least of all New Zealanders who are getting their best chance in 20 years to accumulate some worthwhile retirement savings.
Greg Camm
Managing director
AMP Financial Services | |