KiwiSaver – Turning $24.5 billion into $60.7 billion - Milford Asset

KiwiSaver – Turning $24.5 billion into $60.7 billion

Brian Gaynor

Non-Executive Director

Brian is a non-executive Director of Milford Asset Management, Member of the Board Investment Committee, and he Chairs the Private Equity Investment Committee.

Brian’s career includes roles as a Partner and Head of Research at stockbrokers Jarden & Co, and a member of the New Zealand Stock Exchange. He has also been a board member of a number of listed and public owned entities, including the Guardians of the New Zealand Superannuation Fund. He is also one of the original founders of Milford Asset Management and was Portfolio Manager of the Milford Active Growth Funds (Unit Trust and KiwiSaver) from their establishment in 2007 until April 2017.

KiwiSaver figures continue to show that the scheme is a big winner with the investing public. According to IRD figures, New Zealanders contributed $3.3 billion to the scheme in the June 2018 year and $1.2b for the first four months of the current year.

The following table shows total funds transferred from the IRD to fund managers since the scheme’s inception in 2007.

KiwiSaver contributions ($ millions)

Since the scheme’s inception $43.4b has been transferred to fund managers with 22.1% coming from the Crown, 28.8% from employers and 49.1% from individuals.

Scheme members have had great value for their money because they have contributed $21.3b but have $43.4b of investable funds, excluding investment gains.

The latest Reserve Bank statistics show that total KiwiSaver funds, including investment returns, were $53.6b at the end of September.

However, that figure doesn’t include $3.9b of withdrawals for retirement, death, permanent emigration, serious illness or for some other reason. A further $3.2b has been used for first home and financial hardship reasons.

Thus, the overall benefit is even greater as Milford estimates that for a total investment by members of $24.5b (which includes voluntary contributions made directly to providers), the total KiwiSaver value has been around $60.7b.

Consequently, it is not surprising that KiwiSaver, which at the end of October had over 2.9 million members, is such a popular scheme.

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