ASB CEO Calls for KiwiSaver Compulsion, Contribution Adjustments, and Potential Private Equity Involvement

Highlights:

• KiwiSaver Reform Advocacy: ASB CEO Vittoria Shortt calls for compulsory KiwiSaver enrollment and adjustments to contribution rates, drawing inspiration from successful policies in Australia.
• Investment Growth and Strategic Partnerships: ASB KiwiSaver members contributed NZ$1.7 billion this year, with the fund growing by NZ$1.5 billion, boosted by a successful partnership with BlackRock.
• Exploring New Investment Avenues: While ASB has yet to venture into private equity within KiwiSaver, Shortt expresses a strong interest in exploring this category, inspired by Australia’s super funds.

ASB's Vision for KiwiSaver

ASB CEO Vittoria Shortt is advocating for significant policy changes to KiwiSaver, emphasizing the need for compulsory enrollment and adjustments to contribution rates. Shortt believes that these changes could mirror the success seen in Australia, where similar policies have had a profound impact on retirement savings.

This year, ASB KiwiSaver members have contributed NZ$1.7 billion, with the fund growing by NZ$1.5 billion due to investment returns. Shortt attributes this success in part to ASB's strategic partnership with BlackRock, which has enhanced the scheme’s performance. The results of this collaboration will be highlighted in ASB's upcoming investing climate report.

Simplifying KiwiSaver for Everyday New Zealanders

Shortt is focused on making KiwiSaver more accessible and easier to understand for all New Zealanders. She recognizes the challenge of getting younger people to prioritize retirement savings over more immediate goals, like buying a home. "It's not always front of mind for people," she acknowledges. ASB aims to remove these barriers by encouraging small, consistent contributions that can lead to long-term financial security.

Exploring Private Equity in KiwiSaver

While ASB has yet to make a move into private equity within KiwiSaver, Shortt expresses a keen interest in exploring this investment category. She notes that Australia's super funds are heavily involved in private equity and is curious about how similar strategies could be adapted for New Zealand. However, she emphasizes the importance of approaching this potential shift cautiously and appropriately.

Market Competition

ASB remains competitive in the KiwiSaver market, currently neck and neck with Fisher Funds. According to Morningstar’s KiwiSaver report for the second quarter of this year, both firms hold 15.1% of the market share, each managing NZ$16.8 billion in assets. While Fisher Funds outpaced ASB in fee revenue, with NZ$160.1 million compared to ASB’s NZ$100.3 million, ASB’s focus on strategic development and policy advocacy may set the stage for future growth.

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