Fisher Funds Chief Executive Simon Power says he hasn’t had any discussions with the Minister of Commerce about a KiwiSaver review – but he’d be interested in having the conversation.
Power spoke at an Institute of Finance Professionals New Zealand (INFINZ) event on Thursday afternoon where he discussed his career in the public and private sectors.
He told interest.co.nz after the event that Fisher Funds would be interested in participating in a KiwiSaver review, a move that the Minister of Commerce and Consumer Affairs Andrew Bayly signaled earlier this year.
“I think we'd be interested in participating, yeah. But I don't know what direction he's talking about or what the underlying assumptions are, but if that's his intent, we'd be interested,” he said.
What would Fisher Funds want to bring to the KiwiSaver table to discuss? Top of mind is understanding KiwiSaver’s role, Power said.
“As I described at the meeting, it’s more than smoothing the cost. It's a way of thinking about savings. It's a way of thinking about financial literacy. It's a really important part of the economic outlook.”
During the INFINZ event, Power was questioned about the possibility of reassessing the percentage of contributions into KiwiSaver in the future, particularly in light of how appealing trans-Tasman relocation could look when comparing superannuation and retirement fund contribution rates.
In New Zealand, people can contribute 3%, 4%, 6%, 8% or 10% of their before-tax pay to KiwiSaver which isn't a compulsory scheme. By law, employers are required to contribute 3% of their employees' gross salary or wage into KiwiSaver if their employees are part of the scheme.
In comparison, Australia's equivalent to KiwiSaver is the Australian Super and the compulsory rate is currently 11% – although that's set to rise to 12% by July 2025. Employers have to match this amount as well.
“I think that a discussion at the right time would be an appropriate way to lay the possibilities out,” Power said.
“What I would say is that the contribution that the Super Fund and KiwiSaver providers have lined up alongside the universal funding of superannuation needs to be thought of as three different parts of the triangle or the pyramid. And I think we won't be far away from a time when this idea that Super Fund and KiwiSaver are smoothing some of this obligation. I think the conversation's not far away where all three parts of that equation need to be considered together as part of policy, as part of policymaking.”
Research firm Morningstar reported on Tuesday that KiwiSaver funds under management had reached $108.6 billion and Power told interest.co.nz that those funds were starting to mature.
“The question is how can you make it mature more quickly and in a more effective way? And those things would be definitely conversations that I'd be interested in.”
Fisher Funds is now the second biggest KiwiSaver provider according to Morningstar after ANZ.
The provider has been in the number two spot since the September 2023 quarter and in the March quarter had a steady market share of 15.4% of the KiwiSaver market and almost $16.7 billion in funds under management.
ANZ for comparison currently has an 18.8% KiwiSaver market share and $20.4 billion in managed funds.
LA to the Beehive
Power’s varied career included a long stint in politics but as he told INFINZ event MC Annie Zhang, it didn’t start off that way.
Power was born in Wellington but grew up in Palmerston North before moving to Wellington to study law – not politics. Why? Because he enjoyed LA Law and thought he’d like studying the real thing.
“I thought that could be something I could do pretty well, actually. As it turned out, that wasn't the case.”
It wasn’t until Power took a first-year politics course – where he sat in the back row “like all the characters from the provinces did” – that he realised a career in politics was more up his street.
“I remember sitting there listening to it and the lecture theatre emptied out. And I was still sitting in the back row. And I can remember thinking, this is what I want to do,” he said.
He first became the National MP for Rangitikei for 1999 and was a spokesperson for 12 different portfolios between 1999 and 2008 while Helen Clark’s Labour government was in power and National was in opposition.
He noted an encounter with Lianne Dalziel – who was Minister of Immigration, Minister for Disability Issues and Minister for Senior Citizens in the first term of Labour’s nine years in power – early on in his first term in opposition that stuck with him.
Dalziel told Power that spending your first term in opposition was a good way to learn the ropes and two terms in opposition would give even more learning opportunities.
“And then she said to me, it's the third term in opposition that'll kill you. And that was absolutely right.”
National won the 2008 election and Power, among other roles, became Minister of Commerce, State Owned Enterprises and Justice, portfolios he held until he announced he was leaving politics in 2011, a decision he said was made to spend more time with family.
“I did the maths. I knew enough to understand the ebb and flow of how governments operate, back to my study of the 1984 cabinet,” he said.
“And look, quite frankly, I did 11 school camps with my two boys, which I would not have been able to do if I'd still been in politics.”
Power became Westpac’s head of its private bank in January 2012 after leaving politics and stayed with the bank for over eight years until Catherine McGrath took over as Westpac’s CEO in November 2021.
He then jumped into the CEO role at TVNZ in March 2022 for 16 months, leaving in June 2023. His timing was right in the middle of the announcement and then cancellation of the proposed TVNZ-RNZ merger.
Somewhere amongst the juggle of being a chief executive of giant corporations, he’s also managed to complete a masters degree in political science and started a PhD last year at the Victoria University of Wellington on US presidential leadership.
Before the INFINZ event started, Power told interest.co.nz he was enjoying the Fisher Funds job – and still managing to fit in his PhD studies around the role thanks to the patience of his teachers. It’s fair to say he’s keeping busy.
6 Comments
In the end KiwiSaver will replace National Super. Has to.
But we will do it far to late. It would be better to have made that switch twenty years ago.
Cue howls from the masters of their own investing, and those who still think when the government pays for them it's free.
Certain nordic countries recognized this almost a century ago and hence their pension funds are filled to the rim. (Norway; Denmark; Netherlands). Additionary benefit is that their pensionfunds provided capital into applied research and developments at Novo-Nordisk; ASML; and many other frontline technology businesses. New Zealand is coming to the party very late!
The tax incentives are so poor compared to other countries. How about deferring all taxes until withdrawal. $10 a week in tax credits is nothing but another form of bracket creep. As usual PAYE earners are just cows on the tax farm while rent seeking income is almost tax free.
Product Disclosure Statements (PDS) are great but I'd like to see a standardised label for each KS fund which is based on nutritional labels or the energy efficiency rating you see on applicances. The US recently did this with their broadband law now each company to display a nutrition-like label prominently: https://www.theverge.com/2024/4/10/24125572/fcc-broadband-nutrition-lab… There are certain companies (cough AMP) that do the utmost to hide the PDS deep down at the bottom of their website. Some funds are pretty much throwing a bunch of darts on a wall to pick the stocks and still charging over 1% in fees which is mad when ETFs now cost less than 10 basis points and outperform managers.
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