The Government has today released the Request for Proposals (RFP) to appoint the next set of KiwiSaver default providers.
When people enrol in KiwiSaver but don’t actively choose an investment fund, the Government allocates them a default fund. The current nine default providers were appointed in 2014, and the tender process will help determine the next set of providers to be in place by December 2021.
After a review of the KiwiSaver provider arrangements initiated by Minister of Finance Hon Grant Robertson and Minister of Commerce and Consumer Affairs Hon Kris Faafoi, MBIE and the Treasury developed a discussion paper on proposed changes and sought public feedback. Earlier this year, the Government changed the default provider settings following consultation.
The new settings used in the RFP are aimed at ensuring default funds work in the best interests of default fund members. Setting changes include:
- switching default fund settings from ‘conservative’ to a ‘balanced’ fund to improve the likelihood of increasing people’s returns in retirement
- requiring default providers to do more to engage with their members and help them make the right decision for their circumstances
- incentivising default fund providers to charge reasonable fees by making fees a significant part of the overall evaluation during the tender process
- excluding funds that invest in fossil fuel production to help address the impacts of climate change and transition to a low-emissions economy
- transferring non-active default members of any provider that is not reappointed to one of the appointed default providers, to ensure these members retain the benefits of being in a default fund.
The RFP closes on 18 December 2020.
To view the RFP, visit www.gets.govt.nz.