Bay of Plenty Business News October/November 2016

PROFESSIONAL SERVICES
BAY OF PLENTY BUSINESS NEWS October/November 2016 21
How to get your KiwiSaver decisions right
KiwiSaver has been prominent in the media recently as it nears its
tenth anniversary. Over that period it has grown to more than $35
billion in funds under management, with 2.6 million members.
Based on recent population
figures, perhaps
another 600,000 working
age New Zealanders are
yet to sign up for KiwiSaver*
In my view there are four key
decisions to make with regard
to KiwiSaver:
– Should I sign up to
KiwiSaver or not?
– How much should I
contribute?
– Who should I sign up with?
– What investment option
should I take?
1) Signing up to KiwiSaver
will depend on an individual’s
own set of circumstances, but
generally, it makes financial
sense for all employees to sign
up due to the matching of contributions
by their employer to
a certain level, and the government
contribution.
For self employed, there is
still a financial incentive due
to the government contribution
at minimum levels, but the
advantage is not as great.
KiwiSaver is a means to
initiate a regular savings discipline
for retirement, which for
many is lacking.
Other than for a first home,
generally accessing those savings
can’t be done until age
65. Overall, it makes sense
for most individuals to be in
KiwiSaver at some level.
2) Although the $1000 kick start
payment by the government
was removed in April 2015, the
Government still contributes 50
cents for every $1 contributed,
up to $20 per week.
If your contributions
are being matched by your
employer, then on the first $20
per week you contribute, your
return equates to a guaranteed
150 pecent ($30 for every $20
contributed per week), excluding
any investment return.
This is about as close to a free
lunch as you can get in investment
terms. As an employee
you can choose to contribute 3
percent, 4 percent or 8 percent
of gross salary or wages.
If self-employed, you can
make voluntary contributions
at any time, either regular or
lump sum contributions.
Calculators on KiwiSaver
provider websites such as
Summer KiwiSaver’s at www.
summer.co.nz, or others such
as the government’s www.sorted.org.nz,
are available to estimate
how much savings might
grow to over time, and assist in
planning for retirement.
In terms of what level of
contribution to make, at least
contributing the minimum
would ensure you receive full
entitlement to the government
and employer (if employed)
contributions.
3) Of the current KiwiSaver providers,
two KiwiSaver schemes
manage more than $5 billion in
assets while another eight manage
over $1 billion. Together
these schemes represent nearly
87 percent of members.
Eight schemes are default
providers, which mean those
employers, and KiwiSaver
members who have not chosen
a specific provider, get allocated
one of the default providers.
Bank schemes dominate the
space, and switching between
schemes is common place and
easy to do.
As individual KiwiSaver
balances grow, those providers
who are able to provide
advice and assistance to investors
are likely to pick up more
business.
Rather than being allocated
a default provider, employers
may see real benefit for their
staff and business by choosing
providers who offer advice and
assistance.
While media reports focus
on low fees and the highest
returns as a means to select
providers, this is a bit of a red
herring, as returns are driven
more from which underlying
types of assets the KiwiSaver
funds are actually invested in.
4) The investment option
decision is arguably the most
crucial decision to make, and
will have the biggest impact on
the end result achieved come
retirement.
Going in to a default option,
i.e. not making a decision at all
is probably the worst thing you
can do.
As a general guide, the
longer you have before retirement,
the higher the level of
risk you can afford to take, as
growth assets have much more
time to recover from any significant
downturn.
It is worth taking the time to
make the most of KiwiSaver,
regardless of whether you are
an employer, employee or
self-employed.
If needed, seek advice.
WHAT TO DO WITH YOUR MONEY
> BY BRETT BELL-BOOTH
Investment Advisor with Forsyth Barr Limited in Tauranga.
Phone: (07) 577 5725 or email brett.bell-booth@forsythbarr.co.nz
The Summer KiwiSaver
Scheme is managed by Forsyth
Barr Investment Management
Ltd.
You can obtain the
Scheme’s product disclosure
statement and further information
about the Scheme at
www.summer.co.nz, from one
*(figures courtesy of KiwiSaver Annual Market Report 2016 by David Chaplin).
of our offices, or by calling us
on 0800 11 55 66.
This column is general in
nature and is not personalised
investment advice. Disclosure
Statements for Forsyth Barr
Authorised Financial Advisers
are available on request and free
of charge.
If you are considering your current
investment arrangements, perhaps
it’s time to get a complimentary review
Forsyth Barr is a New Zealand owned firm with 21 offices nationwide
including three offices in the Bay of Plenty and Waikato regions.
Supported by Forsyth Barr’s research and investment expertise, our Authorised
Financial Advisers can work with you to deliver a personalised approach taking
into account your investment objectives, preferences and your tolerance for risk.
To make an obligation free appointment to discuss your investment
arrangements, contact your local Forsyth Barr office by calling 0800 367 227.
We look forward to discussing how our investment advice can work for you.
Disclosure Statements are available on request and free of charge.
Fees and charges will apply if you elect to have a continuing relationship with Forsyth Barr.
TAU5162-01 – © Forsyth Barr Limited August 2016
Business wellbeing key to success
PressGo is a
boutique business
providing tailored
information, support
and education to
other businesses
seeking to become
healthy and vibrant.
By identifying the wellbeing needs of your
business, PressGo will help you to create
an appropriate and relevant solution wherever
you may be in New Zealand.
Workplace wellbeing in not only the
‘airy, fairy, touchy, feely’ fashionable
trend that at best gets overlooked and
at worst is ignored completely. It is, if
left unrecognised and not responded to,
something that can derail your business
completely.
Considering that most of us spend a
third of our day at work, it is becoming
more important for the decision makers
in your business to invest in creating a
positive work environment for your team.
A healthy and vibrant workplace, will
help you to:
• Attract and retain the right staff;
• Build a strong reputation;
• Improve morale;
• Reduce absenteeism; and
• Reduce the effects of stress.
PressGo helps business owners and
managers to improve the quality of their
own wellbeing and that of the business.
Stress and burnout are key indicators
that something isn’t right and if you’re not
looking after yourself, how can you look
after your business and its most valuable
asset – your staff?
Karen Covell and Angela Meyrick
PressGo provides a tailored solution
to your wellbeing need. We can cover
anything from a wellbeing workshop
for your team, through to creating and
reviewing business documents and systems.
And, we will make every effort
to fit the cost to your budget.
Between them, PressGo’s team has
almost 50 years’ experience working in
the health and wellness environment,
and we are confident we can find a
solution for you and your business.
PressGo is a division of Progress to
Health. We have transferred the expertise
of working with individual people
to improve their own wellbeing to a
business setting.
If you are wanting to build a healthy
and vibrant business – PressGo.
www.pressgo.co.nz
email: angela@pressgo.co.nz
mob: 027 229 6998
For more than 25 years Spurdle Accountants
has provided solutions for the self employed
client right through to businesses with multimillion
dollar revenue.
We have developed a niche in looking after
medical professionals and their practices.
For some fresh eyes and ideas call Craig
Kilmister, Director of Spurdle Accountants Ltd.
Craig Kilmister CA,BCA,BBS
Director
1488 Hinemoa Street,Rotorua 3010
PO Box 12100, Rotorua 3045
DDI 07 349 5008
P 07 349 5000
M 027 455 9301
E craig@spurdle.nz
W www.spurdle.nz
30389
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