Hundreds of thousands of people may not know who is managing their KiwiSaver money because of problems with getting their addresses correct.
The issue was raised yesterday by industry body the Investment Savings and Insurance Association at a meeting of KiwiSaver providers in Auckland.
ISI chief executive Vance Arkinstall said the problem particularly affected those who were auto-enrolled in the Government’s default schemes.
People are automatically enrolled when they change employer. The Inland Revenue then randomly allocates them to one of six schemes and their details are then sent to the provider.
But Arkinstall said it appeared as much as 30 per cent or about 200,000 of those in the default schemes could not be contacted by their provider because of wrong information. \”The information being provided by the Inland Revenue is not up to scratch and it looks like there is a problem with them getting information.\”
A spokesman for Inland Revenue said it was compulsory for employers to provide contact information for any staff that joined KiwiSaver and it then passed on that information to the provider.
But it was then up to individuals to keep their provider up to date.
\”After that transaction is completed, it is up to the individual to keep both Inland Revenue and the KiwiSaver provider up-to-date with their personal details.\”
But providers say thousands of letters sent to savers are being returned to them because of poor data. Greg McAllister, head of wholesale distribution for ASB Group Investment, which runs the largest default scheme, said up to 5 per cent of its more than 200,000 members could not be contacted.
\”If the data comes through poorly that is all we have got and the ability to go back and check that information isn’t straightforward as people get hampered by the Privacy Act. We are left with several thousand people we are trying to get in contact with.\”
The problem means people may not receive the letter telling them who their KiwiSaver provider is or the annual statement on their KiwiSaver balance and annual report explaining the returns of their fund.
McAllister said some people could be in KiwiSaver for more than a year and still not know because it was new and they did not know what to expect from their provider or Inland Revenue.
AMP head of marketing Blair Vernon, another default provider, said they had been forced to put large-scale resources into tracking people down.
\”It’s a real issue. It really concerns us the lack of data integrity in files.\”
Tower head of investments Sam Stubbs said it raised questions about how accurate the Inland Revenue was with its data collection.
\”It appears it’s an IRD problem. It raises questions about how accurate IRD’s information is.\”
He said providers should be allowed to contact employers to get contact information about their members. But Vernon said providers had to respect the privacy of individuals.
\”The key thing is if you haven’t received correspondence and you think you are with a scheme, call and ask.\”
McAllister said both Inland Revenue and providers needed to work on resolving the problems and said an 0800 number should be set up by the department for people to call about KiwiSaver which would allow them to find out which provider they are with and then divert them to the call centre of that provider.
Arkinstall said he would try to meet with Inland Revenue minister Peter Dunne in the next few weeks to resolve the problem.
Reference: http://www.nzherald.co.nz/personal-finance/news/article.cfm?c_id=12&objectid=10626876&pnum=0