BT Drops Westpac KiwiSaver Administration Fees for under 18’s
BT Funds Management (NZ) Limited (BT) is coming to the party by helping to enhance financial literacy among the next generation of Kiwi investors. Children under the age of 18 who are members of the Westpac KiwiSaver Scheme, which is managed by BT, will have the 2010 monthly administration fees waived on their Westpac KiwiSaver investment. This applies to both current members of Westpac KiwiSaver as well as new investors under the special Starter Pac promotion. And where a deposit is also being made into the child’s Westpac savings account each year, BT will waive the following year’s administration fees on their Westpac KiwiSaver investment.
The Government used to contribute a $40 fee subsidy towards administration fees, but that was changed in April 2009, and fees are now met by KiwiSaver members, something which can erode a member’s KiwiSaver balance as Andy Morris of Westpac’s Investment Advisory Service explains:
“The Government still gives the $1000 kick-start to members when they join their first KiwiSaver scheme, which is great, and a real incentive for anyone under the age of 65 to sign up. But if you’re not earning, and not putting any money into the investment, those monthly fees can eat away at the balance. So BT is offering to waive these monthly fees for children under 18 if there is a deposit, no matter how small, into the child’s Westpac savings account every year.”
Mr Morris says this has a double benefit – saving the administration fee, and enabling both the savings account and the KiwiSaver investment to grow, with compounding returns.
“It also gives the child a really good start to their savings in life. The earlier you start saving, the more powerful and effective the power of compounding returns are. It’s great to teach this to your child, and help them see their savings grow. You’re not only setting them up for retirement, but they may be able to use some of their KiwiSaver savings to help buy a house in the future.”
Mr Morris says KiwiSaver also teaches young people a great lesson, that saving is not easy and can hurt a bit, but the end result is well worth it. “Once they understand the power of compounding returns, they can see why saving, even a little bit on a regular basis, is so important. Compounding returns has been called the eighth wonder of the world – it should be mandatory teaching in schools!”
As KiwiSaver incentives are determined by Government policy and current laws, it is important to be aware that these may change in the future.
You can get a copy of the current disclosure statement for Westpac New Zealand Limited, an investment statement for the Westpac KiwiSaver Scheme, and the terms and conditions of the Westpac Starter Pac promotion from any Westpac branch in New Zealand free of charge.
The Westpac KiwiSaver Scheme (Westpac KiwiSaver) is issued by The New Zealand Guardian Trust Company Limited and managed by BT Funds Management (NZ) Limited. Investments made in Westpac KiwiSaver do not represent bank deposits or other liabilities of Westpac Banking Corporation, Westpac New Zealand Limited or any other member of the Westpac group of companies, are subject to investment and other risk, and are not guaranteed by the Issuer, the Manager or any other person.
Westpac New Zealand Limited.
For more information on the Westpac Starter Pac, visit your local Westpac branch or call 0800 400 600.