Choosing a KiwiSaver scheme can be like choosing a pizza

Choosing a KiwiSaver scheme can be like choosing a pizza

When it comes to ordering a pizza, there are so many different outlets we can use, and, even then, there are so many different flavours to suit our tastes – from meaty, seafood, vegetarian to vegan pizza.  There’s even a range of crusts we can choose between, from thin to crusty to pan fried.  For the more health conscious among us there’s now available four-star nutritional pizzas.

You know, choosing the right KiwiSaver provider and scheme for you can be like choosing the type of pizza we want.  There are so many providers out there, and even when we may have found a provider we like there’s a range of funds between conservative, balanced, growth or aggressive and it can be confusing.

Now, like choosing that nutritious pizza, there’s a range of ethical – or socially responsible – KiwiSaver schemes and providers in the market.  This can make it difficult to choose something that matches what we’re looking for.  While in selecting a pizza it will depend on what flavour or taste we’re looking for, in choosing a KiwiSaver scheme that’s right for us it’s down to our individual values and beliefs.

Values are very abstract concepts aren’t they? But basically they’re our preferences and priorities.  We only really know that values are in our lives when we’re living in line with them.  Unlike that pizza in the picture, values are so intangible; we can’t touch them.  It could be said that our values are ideas that enable us to prioritise all our experiences.

Our beliefs influence and create our values.  The Christian KiwiSaver Scheme is based on universally accepted Christian values, and our investment team apply those values to where funds are invested.

Just like in choosing the type of pizza you eat – whether you want a vegetarian or even vegan pizza the key to avoiding any value conflicts is to be really clear about your priorities and align these with all aspects of your life – from your choice of pizza to including in your KiwiSaver provider or fund the type of companies you would want to invest in.

When next you order a pizza think about how you choose the toppings and base, see if it lines up with your values.  If you would like to talk with us about our ethical investment options check us out at Anglican Financial Care’s Christian KiwiSaver Scheme website. Or, if you prefer, give us a call on (0508) 738 473.

Some more KiwiSaver jargon

Some more KiwiSaver jargon

There’s a lot of jargon used by the media and others when it comes to KiwiSaver and we started explaining some of this in our October 2019 issue. We try to use plain English but every now and again a bit of jargon is inevitable in our communications with you. Please tell us if there is something you’d like us to explain. This explanation covers the various roles involved with the governance and running a KiwiSaver scheme.

Trustee can be individuals or an organisation, and they hold all contributions and investments in trust. As the Christian KiwiSaver Scheme is a restricted scheme, the Trustee by law is the Manager.

Manager this is your KiwiSaver scheme provider, e.g. Anglican Financial Care, and is the organisation responsible for managing the scheme.

Issuer generally means the Manager of the particular KiwiSaver scheme. For the Christian KiwiSaver Scheme this means Anglican Financial Care.

Administrator, sometimes called the Administration Manager, is the organisation appointed by the Manager to handle the day to day workings of the scheme, e.g. updating your account details, your account balance and paying withdrawals. For Christian KiwiSaver Scheme this means Anglican Financial Care.

Investment manager, sometimes called Fund Manager, this is a person or organisation appointed by the Manager to look after all or some of the KiwiSaver scheme’s investments. Anglican Financial Care undertakes the investment activities for Christian KiwiSaver Scheme.

Custodian and Supervisor are other terms you might hear. The Christian KiwiSaver Scheme is a restricted KiwiSaver scheme (explained in the October 2019 issue) and therefore does not need to appoint people/organisations to these positions.

The Financial Markets Authority which is also referred to by its initials FMA, is the Government agency responsible for enforcing securities, financial reporting and company law as they apply to financial services and securities markets. They also regulate securities exchanges, financial advisers and brokers, auditors, trustees and issuers – including issuers of KiwiSaver and superannuation schemes. As the Manager and Issuer of the Christian KiwiSaver Scheme Anglican Financial Care is required to file a variety of reports to the FMA.

There is a KiwiSaver Glossary on the website under Documents/Guides & Policies that explains most of the KiwiSaver related jargon.

 

Some KiwiSaver jargon

Some KiwiSaver jargon

There’s a lot of jargon used when it comes to KiwiSaver. It’s used by the media, the regulators and also people like us, your KiwiSaver provider. We try to use plain English but every now and again a bit of jargon is inevitable in our communications with you. We’re going to cover a few terms in each newsletter. Please tell us if there is something you’d like us to explain.

 KiwiSaver provider means the organisation responsible for managing a KiwiSaver scheme, e.g Anglican Financial Care is the organisation responsible for managing the Christian KiwiSaver Scheme.

Regulator generally means the Government body responsible for overseeing the particular product, service, etc. For KiwiSaver schemes this means the Financial Markets Authority (also referred to as the FMA). They’re important as they keep an “eye” on the providers and others involved with your KiwiSaver scheme.

KiwiSaver scheme is the scheme you join. You can only belong to one KiwSaver scheme at a time. The Government sets out the rules for KiwiSaver schemes in an Act of Parliament, the KiwiSaver Act. A KiwiSaver scheme is run by a KiwiSaver scheme provider and a KiwiSaver provider can offer more than one KiwiSaver scheme.  Typically each scheme has a number of funds into which you can invest. Anglican Financial Care has only one scheme, the Christian KiwiSaver Scheme and within it offer 3 funds – the Growth, Balanced and Income Funds.

Restricted KiwiSaver scheme is a KiwiSaver scheme that is not open to the general public, and has restrictions on who can become a member, i.e. the Christian KiwiSaver Scheme is not open to everyone.

Licensed Independent Trustee. Each restricted KiwiSaver scheme must have a Licensed Independent Trustee. The FMA oversees who can be a Licensed Independent Trustee. Brendan O’Donovan is the current Licensed Independent Trustee member of Anglican Financial Care’s Board.

There is a KiwiSaver Glossary on the website under Documents/Guides & Policies that explains most of the KiwiSaver related jargon.

Guns are not cool now

Guns are not cool now

Many of us have grown up with the stories of Winnie the Pooh.  If we didn’t, some of us may have seen the recent movie called ‘Christopher Robin’ which re-introduces Winnie the Pooh to a wider audience.

Many of us would be surprised to know that Winnie the Pooh owned a gun in 100 Acre Wood.  We would be puzzled as to why they would own guns in that wood as they don’t hunt, and they don’t have target practice. Yet, in one account of Winnie the Pooh’s exploits, there was a knock on the door of his tree.  Winnie answered the door … with a gun in his hands.

When A. A. Milne started writing about Winnie the Pooh in 1926, it was a different time with a different attitude toward guns.  Like climate change, guns and munitions have increasingly become something that people are concerned about.

After the attacks on the Al-Noor Mosque and the Linwood Islamic Centre in Christchurch earlier this year there has been a growing concern about whether New Zealand KiwiSaver providers have invested funds in arms or munitions.  There are some providers that have invested in this industry.  But the Christian KiwiSaver Scheme is not one of those; it is among a small number of KiwiSaver providers that provide ethical investments and excludes munitions.

In a recent Colmar Brunton survey, over 70 percent of respondents answered that it was important for them that their KiwiSaver money was not invested in weapons.  The survey found that a lot of members didn’t know if their funds were invested in munitions at all.

In New Zealand, there are over 2.7 million people signed up with KiwiSaver.  The New Zealand Herald quoted a 2018 Consumer survey finding that around seven out of 10 people wanted their money invested ethically. But only around 8,600 people had signed up to specifically targeted ethical investment funds.  While some people may hesitate in investing in ethical funds as they may feel these funds give lower returns, some of the best companies in the current market are those that are the most sustainable companies – they look after the environment and their employees.  So thinking seems to be changing among investors.

Remember you can log into your account and check which fund your money is invested in. Or, if you prefer, give us a call on (0508) 738 473.

 

 

Winnie the Pooh image from www.disneyclips.com

KiwiSaver now open to 65+

KiwiSaver now open to 65+

From 1 July 2019, the age 65 restriction on joining was removed and this group of New Zealanders (and permanent residents) can now join and invest in KiwiSaver.

KiwiSaver is now an investment option for New Zealanders who are 65 or older. So why join KiwiSaver at this stage of life? Well, it provides an opportunity invest into a professionally managed savings product without your money being ‘locked away’ (as is the situation for those aged under 65 except in certain circumstances). The other thing is that life expectancy is increasing meaning your savings need to work harder to last over a longer period.

Christian KiwiSaver Scheme offers members a choice of three investment funds – Growth, Balanced and Income. The Income Fund has the lowest level of risk attached to it.

Christian KiwiSaver Scheme offers its members a KiwiSaver scheme that is invested under universally accepted Christian values. Long before it became trendy we were investing our funds in an ethical and responsible way. As Christians we like to make investment choices that resonate with what we believe.

While Christian KiwiSaver Scheme does not offer its members a “pension” we can pay your savings to you as a regular income each month or quarter. The frequency is your choice. You can also withdrawal large amounts (or your whole balance) at any time. We do not currently charge a transaction fee for regular payments or other payments.

Changes to KiwiSaver – what do they mean for you?

Changes to KiwiSaver – what do they mean for you?

The Government has recently proposed some changes to KiwiSaver for next year.

More contribution rates for employees.

At the moment you can contribute at 3%, 4% or 8% of your pay.

From 1 April 2019, it’s intended that you’ll also be able to contribute at 6% and 10% of your pay.

This gets the big tick from us as it gives you more flexibility over the amount you save.

Perhaps review your level of contributions when you receive a pay increase, it’s a great time to take the opportunity to save a little more.

Savings suspension timeframe reduces

‘Contribution holiday’ changes its name to ‘savings suspension’.

From 1 April 2019, it’s intended that the maximum period for ‘savings suspensions’ reduces from 5 years to 1 year.

If you want to continue with a savings suspension then you’ll need to apply to Inland Revenue each year to renew it.

These two changes also get the big tick from us. A ‘holiday’ generally means good times, stopping your retirement savings might not be the best thing for you in the long run. During this time members also miss out on the government’s contributions of up to $1,042.86 each year (that’s potentially $5,214.30 over 5 years).

Removing the age 65 restriction on joining

At the moment people over 65 cannot join KiwiSaver. From 1 July 2019, it’s intended that the age 65 restriction on joining is removed and the 5 year lock-in period on joining is also removed. There is no change to the age at which you qualify to withdraw your KiwiSaver savings, this remains age 65.

This gets another big tick from us. KiwiSaver will be open to all New Zealanders and provide a convenient and cost-effective investment option to just holding your savings in a bank account or on fixed deposit.

From our perspective, it’ll also allow New Zealanders over 65 to join our Christian KiwiSaver Scheme and have access to investment funds invested under an ethical investment policy.