KiwiSaver membership growth bounces back up 

KiwiSaver membership growth analysis from TOWER Investments: December 2011

KiwiSaver provider TOWER Investments has released its regular monthly analysis of the IRD’s KiwiSaver membership statistics for the month of November, 2011.

“After a stretch of falling in seven out of the previous eight months, new KiwiSaver sign-ups bounced back up in November to take total membership very close to 1.85 million New Zealanders,” said Sam Stubbs, Chief Executive Officer of KiwiSaver provider TOWER Investments.

“The rate of monthly new membership increase lifted back over 19,000 people, a level last seen in August of this year.”

“The monthly new membership rebound was impressive primarily because November was a general election month and KiwiSaver had become a political football, with political parties competing to propose yet more changes to the scheme.”

“The jump in new enrolments may have represented KiwiSaver being top of mind with voters because the politicians were talking about the scheme so much.”

“In the joining method categories of new membership signup, both opt in via provider (+1%) and automatically enrolled (+1.3%) picked up noticeably.”

“The lift in automatically enrolled new membership might point to increased hiring in the run up to Christmas.”

“The final outcome of the election reaffirmed the changes proposed for KiwiSaver by the National-led government back in its May budget.”

“Perhaps this is a good thing, as with KiwiSaver a rest is as good if not better than a change given how often the scheme has been altered to date and the impact this perceived instability has on public confidence in KiwiSaver as a long-term savings vehicle.”

“Also now very likely will be opportunities for KiwiSaver schemes to invest in partially privatised state-owned enterprises over the next three years.”

“TOWER would be interested in investing its KiwiSavers’ funds into these partially privatised SOEs because of the healthy dividend streams that would likely be forthcoming, but not at just any asking price.”

“A major factor in the appetite for investing our KiwiSavers’ funds into partially privatised SOEs will be whether the asking price for the initial public offering looks fair and reasonable.”

“If the offer price for SOE flotations is too rich, that could put a dampener on demand from KiwiSaver schemes, with fund managers tending to favour waiting for prices to fall post-listing,” Mr Stubbs said.

KiwiSaver at a glance for November 2011:

For further information please contact: Sam Stubbs, CEO TOWER Investments
Tel: 09 369 2284, Mobile: 021 491 547, Email: sam.stubbs@tower.co.nz