MySuper vs. KiwiSaver: Retirement Saving for the Less Engaged
Forthcoming, Applied Finance Letters
14 Pages Posted: 27 Aug 2014 Last revised: 30 Sep 2014
Date Written: September 30, 2014
Australia’s MySuper default superannuation funds are compared against New Zealand’s range of KiwiSaver funds. Some key points of contrast include: the relative maturity and larger balances of the Australian system; the majority of MySuper providers are not-for-profit, whereas KiwiSaver is dominated by for-profit providers; MySuper funds use a much broader range of assets, while KiwiSaver funds invest largely in listed assets; greater use of lifecycle strategies in Australia; the skew to conservative funds under KiwiSuper; and differing fee structures, the impact of which depends on account balance. It is argued that New Zealand could do more to enhance the probability of achieving adequate incomes in retirement.
Keywords: Superannuation, MySuper, KiwiSaver, regulation, portfolio construction, fees
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