KiwiSaver membership nudges 1.8 million

Wed, 14 Sep 2011

KiwiSaver membership growth analysis from TOWER Investments: September 2011

KiwiSaver provider TOWER Investments has released its monthly analysis of the IRD’s KiwiSaver member count for the month of August, 2011.

“The rate of KiwiSaver membership growth picked up noticeably in August after slumping in the wake of the Government’s May Budget,” said Sam Stubbs, Chief Executive Officer of KiwiSaver provider TOWER Investments.

“Almost 20,000 new members signed up in August, increasing total member count by 1.1% to just short of 1.8 million New Zealanders,” he said.

“If this rate of sign up persists, the total member count will exceed 1.8 million at the end of this September and will reach two million within 10 months.”

“The big jumps in original joining method categories were around 9,000 each in opt in via provider and automatically enrolled by employer,” he said.

“There has been some optimism recently expressed in business confidence surveys that might be reflected in more automatic enrolments of new employees.”

“The Rugby World Cup may also have increased automatic enrolments due to a burst of new hiring to cope with expected demand from rugby fans.”

“With all the doom-and-gloom spilling in from overseas regarding Europe’s sovereign debt problems and America’s near recessionary economy, it’s a positive sign that the automatically enrolled category grew by a healthy 1.4%.”

“Growth in automatic enrolments was the highest rate, compared with opt in via provider (1.1%) and opt in via employer (0.6%).”

“The major issue with such robust growth in automatic enrolments is that many new KiwiSaver members will not be in the most appropriate risk profile for their age and objectives because default funds are very conservative.”

Appendix: KiwiSaver at a glance for August 2011:

Membership by original KiwiSaver join member	Raw numbers (IRD supplied)	% net total by join type (TOWER calculation)	Monthly % growth (TOWER Calculation)	Monthly % growth up/down on previous month
Automatically enrolled by employer	663,940	37.0%	1.37%	Up
Opt in via employer	235,114	13.1%	0.58%	Down
Opt in via provider	885,037	49.9%	1.04%	Up
Net total membership	1,794,091	100%	1.10%	Up