It's a significant jump from last year
The FMA’s KiwiSaver Annual Report for the year to March 31, 2024, highlights its strong performance - reaching $111.8 billion in funds under management. This is a 19.3% increase from the previous year, which stood at $93.6 billion.
John Horner (pictured), FMA director markets, investors and reporting, said: “Breaking through the $100 billion mark is something to celebrate; for a relatively small country like New Zealand, it represents a coming of age of KiwiSaver.”
The growth came from $13.1 billion in investment returns and $11.2 billion in contributions from members, employers, and the Crown.
“For many New Zealanders, KiwiSaver may be their first or only investment and a large part of their retirement savings and ultimate financial security,” he said. “KiwiSaver is designed with the purpose of improving individuals’ well-being and financial independence, particularly in retirement, and it was pleasing to see individual contributions through salaries and wages were up to an all-time peak of $5.9 billion this year.”
KiwiSaver providers increased the fees they charge by 18.9%, as it went from $664.1 million in 2023 to $789.6 million in 2024. This reflects the growth in total funds under management. However, the fees haven’t gone up per dollar invested even if they haven’t decreased.
“While we have seen a gradual decrease in fees as a percentage of funds under management over the last 10 years, this wasn’t continued in the 2024 data,” it was explained. “As KiwiSaver grows, I expect to see the benefits that come with economies of scale shared with KiwiSaver members.”
Currently, 3.3 million New Zealanders are enrolled in KiwiSaver, which is 62% of the population. Three million have chosen their provider and fund, while the rest default to one of the six default funds.
“Growth funds now represent 46% of total funds under management, with $51.4 billion invested, and a total of 1.53 million investors selecting a growth fund,” Horner noted. “This has more than doubled from $24.5 billion in 2021.
“Contrasting this year’s report to previous years, we can see how investor behaviour has changed over time, together with the profile of the funds being selected. The FMA has said for some time that younger investors, saving for retirement, should consider funds with more growth assets, as these are more suited to a longer investment horizon. With KiwiSaver in its 17th year, investors have become more comfortable with the long-term nature of KiwiSaver. We believe this is why almost half of all KiwiSavers have moved towards more growth-oriented funds.”
