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Minister of Commerce Simon Power has asked officials to fast-track work to ensure the integrity of KiwiSaver investments, after concerns about regulation for the scheme.
Huljich Wealth Management has brought the spotlight on KiwiSaver account management after it failed to disclose that its then-managing director Peter Huljich had injected cash into the funds because it had not performed well.
Huljich has said he felt morally responsible for the investment decisions, but others say it was to give a false impression about the funds' performance.
The Securities Commission is investigating.
Power says confidence must be maintained for the 1.3 million people who have $4.88 billion of their money invested in the scheme.
"In recent weeks there has been growing concern regarding the regulation of KiwiSaver schemes. Mum and Dad investors must have confidence that their money is being well managed."
Last month the government indicated it supported recommendations from the Capital Market Development Taskforce for additional regulation of managed funds, including KiwiSaver.
"We were intending to make changes in this area as part of the current review of the Securities Act," Power says.
"However, in light of recent developments, I have asked my officials to fast-track this work to ensure investor confidence is maintained."
Officials have been asked to report back within a month on several subjects including whether:
- the monitoring and reporting regime for default funds should be extended to all KiwiSaver funds.
- KiwiSaver funds should be required to regularly report to investors and the regulator on the returns, fees and assets of each fund in a consistent and comparable manner.
- To increase the ability of the regulator to supervise the trustees of KiwiSaver schemes and hold them accountable for fulfilling their obligations.
- Further powers for enforcement by regulators are necessary.
"It must be remembered that though KiwiSaver was set up by government, risk is inherent in investment decisions, and those investments are not guaranteed by government," Power says.
"These changes are designed to plug gaps in regulation which frankly should have been addressed when KiwiSaver was set up."
