Sending projected retirement balance and income to 100,000 KiwiSaver members
KiwiSaver provider Mercer New Zealand is taking a market-leading step for KiwiSaver members by providing retirement balance projections to members of its managed KiwiSaver schemes, one year ahead of a legislative requirement to do so.
From 2019, all KiwiSaver providers will be required to include a projected retirement balance and an annual retirement income.
In Mercer’s commitment to helping members understand and grow their KiwiSaver, Mercer now includes projections in annual member statements that are being sent to approximately 100,000 KiwiSaver members; a year ahead of the legislative requirement.
The annual statements are being tailored into two groups: savers under 65 years of age, and those over 65:
Savers under 65 years of age will receive a projection of what they are on track to receive at age 65, both in terms of a projected retirement balance and an annual income.
Savers at and above retirement age are being encouraged to use Mercer’s projection calculator to help them work out their retirement income.
Martin Lewington, CEO of Mercer New Zealand said, “we have always advocated for greater transparency on members’ annual statements which is why we have implemented this particular change now, a year ahead of the deadline. However, we also believe it is equally important for members to have visibility on what their KiwiSaver accounts are returning on a net basis to ensure they understand what that could translate into at retirement.”
“There has been considerable focus in the market on KiwiSaver fees and our members have been able to see the impact fees have on their net returns as we’ve been including fees in dollar terms in the member statements for a few years now. It’s great to see that all providers will be doing this from this year,” said Mr Lewington.
“Giving people information on projected balances and income, fees and net returns ensures they can take action before it’s too late. While we’re not required to provide this information, we’ve made the decision to include this in our members’ statements because it allows members to check if they are on track to meet their savings goals.”
Lewington says it’s important to check the assumptions and make changes to get a better picture, by using Mercer’s retirement calculator www.retirementsimulator.co.nz.
Mercer KiwiSaver scheme’s default fund has delivered the highest returns of any default fund since KiwiSaver started 10 years ago. In addition, for the last four years the Mercer KiwiSaver scheme has been recognised by SuperRatings for delivering value for money.