Consultation paper: KiwiSaver annual statements - calculation of total fees in dollars

Updated 19 July 2017

Update 

19 July 2017

We have issued a methodology notice which helps KiwiSaver scheme providers calculate the total fees charged to each investor. See the methodology notice, regulatory impact statement and amended guidance note for managed funds on fee disclosure above.

8 June 2017

All KiwiSaver providers will need to display the dollar amount of total annual fees paid by each investor in annual statements in 2018.

We have decided to issue a methodology notice to help KiwiSaver scheme providers calculate the total fees charged to each investor. We will give KiwiSaver scheme providers the option to use either a cent per unit formula (CPU methodology) or a total annual fees calculation (TAFC methodology) to calculate total fees.

Key points:

• We prefer the CPU methodology as it is more accurate. However, if providers don’t have enough time to adopt their systems, they can use the TAFC methodology.
• We originally preferred the TAFC methodology as we were concerned about whether providers would have enough time to implement the CPU methodology before their 2018 annual statements were due. However, some providers told us they could use the CPU methodology, and said they could implement it by March 2018.
• We will review the methodology notice within the next five years. Over that time we will decide whether all providers should use the CPU methodology only.
• The methodology notice will not apply if KiwiSaver scheme providers can calculate the actual fees charged to each investor for the relevant period.
• We strongly encourage providers to also show fees as percentages on members’ annual statements. Seeing both a dollar amount and a percentage value means they can compare the impact of the fees on their funds over time, year on year.

We want your feedback on:

• the draft methodology notice
• the draft amendments to our 2016 Guidance note – Fee disclosure by managed funds.

Submissions closed on  Friday 23 June 2017. 

Please note that the methodology notice is not in effect and cannot be relied on until it comes into effect on the commencement date of the notice.

This consultation was first published on 11 April 2017

All KiwiSaver providers will soon need to display the dollar amount of total annual fees paid by each investor in investors annual statements.

To help providers do this, we will be issuing guidance on the methodology for how the total fees amount should be calculated.

We are seeking feedback on this guidance.

Submissions closed on Friday 5 May 2017.

If you have questions, please contact us at [email protected]