Kiwisaver returns

The Herald reports:

A retirement policy expert says providers should not be allowed to publish investment performance returns based on gross figures because they are “meaningless” and cannot be easily compared.

Finance Minister Bill English announced as part of the Budget that all KiwiSaver providers will have to produce quarterly reports from April including information on investment performance, fees and assets.

A report gives an example of how the information would be set out, placing the gross return percentage at the top of a table, which would also include dollar figures on the gross return based on a $10,000 investment, as well as dollar figures for the tax and fees paid and an explanation of how much in the hand investors would get.

But Retirement Policy and Research Centre director Michael Littlewood said publicity that emphasised gross returns should not be permitted or, if published, they should be given a lower prominence over the net return.

“Gross returns are almost meaningless and are certainly not comparable across providers,” Littlewood said.

“Providers will naturally want to emphasise larger numbers, even if they are not meaningful.”

There is a lot of crappy info about KiwiSaver returns – especially from the self-appointed champion of transparency, and commentator on everything (you know who I mean).

Net returns are harder to do, but should be the default information provided. One can show them for various tax rates if necessary.

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