John Horner: Financial Markets Authority director on KiwiSaver funds breaking $100 billion mark

KiwiSaver investments have broken the $100 billion mark.

The Financial Markets Authority's report for the year to March 31st reveals funds reached $111.8 billion - jumping 19 percent from the previous year.

Member contributions have risen to $11.2 billion and returns are strong at $13.1 billion.

Financial Markets Authority director John Horner says this shows numbers are bouncing back following a previous downturn.

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Episode Transcript

Speaker 1 (00:00):
Now can we save? Our investments have hit a new milestone,
topping over one hundred billion dollars for the first time
in New Zealand. The amount of money in managed funds
has increased by nineteen percent, and what that means is
that sixty two percent of us are now invested in
a Key we Save a fund. John Horner is the
director of the Financial Markets Authority. Hey, John, hi, have
is there a particular reason why our Key we Save

(00:20):
investors investments have jumped up that much in.

Speaker 2 (00:22):
Just a year. Look, it's probably a bounce back from
the prior year where returns on investment we're negative. So
we always look at these things long term. Great to
see your bounce back, but that's the long term accounts.

Speaker 1 (00:34):
What do you make of the number of withdrawals or
the value of the withdrawals?

Speaker 2 (00:38):
Possibly a sign of the times that's there's cost of
living challenges, that's difficult economic conditions, and so it's probably
Key We Saver working as it was designed to allow
those withdrawals to happen.

Speaker 1 (00:49):
How much okay, so how much of the money that's
being withdrawn is being taken out to basically just pay
the bills?

Speaker 2 (00:57):
We won't know the reasons and for for the withdrawals,
I mean, hardship applications. It's quite a high threshold. It's
not a matter if I can't pay my bills just now,
but it's quite a significant threshold to overcome. That's dealt
with by the supervisors SABER providers. They assess the hardship
applications and make those decisions.

Speaker 1 (01:16):
Yeah, just off the top of my head. With something
like five billion that's been taken out in the last year, Yeah.

Speaker 2 (01:22):
I think that's right. Yeah, five billion was drawn by
members and so that'll also be your over sixty fives
as well. So they're the ones who are actually using
their Kiwisaver in their retirement.

Speaker 1 (01:33):
Right, and the key we say, sorry, the over sixty
fives actually make up the vast majority of that about
three billion. But how do we know they don't need
it for hardship.

Speaker 2 (01:42):
Well, they can use it for whatever reason they like, right,
So you're right, I mean, if you're in your retirement,
Keyisaver is all about your financial wellbeing and your retirement years.
Some of those folks will still be working, maybe part time,
maybe full time, but TV tapers available for them to
use as they wish.

Speaker 1 (01:57):
And so I suppose we can't break it out and
look at how many of them are taking it up
because they're leaving the country altogether or anything like that.

Speaker 2 (02:03):
Can we look the numbers are as reported? There's an
also a lot of numbers in there, so I can't
speak to all of them. But yeah, the withdrawals that
the headline figures for the withdrawals as the number week
we focus on.

Speaker 1 (02:21):
What do you make of only sixty two percent of
us being invested in the key we save a fund?
I suppose glass half full. That's not a bad number,
but glass half empty, there's still a fair chunk of
us who aren't invested.

Speaker 2 (02:32):
That's right. We'd always like it to be more. And
but obviously, like the members who are part of KI,
we savor to be contributing. But again, you know, relative
to the times we're going through at the moment, we
think the contributions have held pretty steady. We'd always like
those who have cessed to make contributions to come back

(02:55):
and start those again just as soon as they can.

Speaker 1 (02:58):
John most people are in growth funds. Now, does that
reflect the age of the investors that they are of
a younger profile, or is this something else going on here.

Speaker 2 (03:07):
Maybe not so much the age, more of the investment
horizon that they're looking at as their long term investment.
They've got a long term horizon sort of ten years
and plus. Then growth funders most likely to be the
right tun for them.

Speaker 1 (03:22):
John, it's good to talk to you. Thank you very much,
really appreciate it. John Horner, Director of the Financial Markets Authority. Heither,
can you please look into the realize that agents losing
their licenses for not completing the Maori cultural courses. Yes,
I'm going to raise that with you. You're going to
hear this. You're going to have to hear this. The
old Fletcher Building thing seems to be an old albatross
hanging around some people who are associated with its next

(03:44):
at the moment, A Bruce Hassel. Maybe Buff may be
regretting that he ever had anything to do with it.
He was the chair of Fletcher Building. He has now
just withdrawn his nomination for election to the Victor Board.
Completely unrelated, but has decided to withdraw his nomination for
election because feedback from shareholders. Obviously when it was not

(04:04):
very positive about his previous role as the chair of
Fletcher Building. The Victor's current chair, Doug mckaye's expressed disappointment
on behalf of the board said Hassel had made you know,
significant contributions since he joined last October and blah blah blah,
and he had the unanimous support of his board colleagues,
but unfortunately the shareholders don't love it, and so he's out.
Twelve past six

Speaker 2 (04:26):
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