KiwiSaver funds under management grew by 10 percent to $89.7 billion for the year ended March, according to the FMA's annual report. Photo: 123RF
KiwiSaver funds have shown resilience, but investment returns sank as global markets endured a turbulent period.
The Financial Markets Authority's (FMA) annual KiwiSaver report shows funds under management grew by 10 percent to $89.7 billion for the year ended March.
However, investment returns were at $1.3b, considerably lower than last year's record $13.1b gain, but up on 2020's $820 million loss and in line with a more normal 2019 - which gained $3.8b.
- Total membership 3.17m people (up 2.5 percent)
- Average balance $28,324 (up 7.2 percent)
- Member withdrawals $3.8b (up 24.7 percent)
- Total funds under management $89.7b (up 10 percent)
- Investment returns $1.3b (down 90.2 percent)
- Combined fees revenue $692.6m (up 6.5 percent)
KiwiSaver is now equivalent to around 25 percent of national gross domestic product (GDP), up from 15 percent of GDP in 2017.
The FMA said a net 10 percent of growth in funds was largely driven by $11.3b in contributions from 1.94 million members, including a significant 20.3 percent increase in lump sum contributions worth $2.2b.
It said member balances remained "buoyant" and fund switching returned to normal levels, amid rising living costs and the war in Ukraine.
"The data in this year's KiwiSaver annual report shows the strength of KiwiSaver as a long-term savings vehicle, with resilience to volatility a necessary feature of its design," FMA director of investment management Paul Gregory said.
The total amount invested in growth and balanced funds were up 17.7 percent and 20.8 percent respectively. But assets in conservative funds 14.4 percent fell partly due to turbulence in the bond market.
Conservative funds were also affected as about 300,000 default KiwiSaver members were moved across to balanced funds under the government's new default provider laws.
The average annual fee paid by active members rose by 2.1 percent to $245, while the average annual fee paid by default members fell 11.1 percent to $64.
"New Zealanders have become increasingly aware of the role KiwiSaver can play in their financial well-being and preparedness for retirement, particularly when the likelihood of owning a home becomes less certain," Gregory said.