What’s it like switching Kiwisaver providers?

Have you ever moved your retirement savings? I recently switched to new kiwisaver provider Simplicity and here’s how it went.

Contemplation

I first started thinking about switching kiwisaver providers when I wrote this post about kiwisaver fees. New Zealanders don’t have many options for super low fee retirement funds. My current provider Kiwiwealth while very open and transparent still charged 1.17% in fees. This is (shockingly) below average. Many providers are charging a lot more than this!

Last month a new kiwisaver provider started showing up in the local newspapers. Simplicity claimed very low fees of 0.31%, they are owned by a charitable trust and a 1/3 of their management fees are donated to charity. Its an easy sell, sounds great on paper. Oh and they mostly use index funds, so nice and diverse.

Simplicity Kiwisaver provider

The Switch

I was intrigued, a low fee fund finally on offer in New Zealand! After reading a bit more information on their website (including the product disclosure statement) I boldly decided to make the switch. Simplicity makes it easy to switch, you have to provide your IRD number and upload some identification (scanned my passport). Painless and after that it’s all in their capable hands. Like all good decisions it was made on a Sunday afternoon. I’d been with Kiwiwealth since I first joined kiwisaver, leaving was hard, for the most part they were pretty good but in the last year my balance had flat-lined. I also learned that they don’t invest in New Zealand shares at all. Which didn’t sit well with me and maybe that’s not very rational, but I like to think we have a few companies here in New Zealand doing exciting things. Show a little faith in your home economy!



 

Patience and Denial

The days dragged on, I paced, I checked my emails constantly. I logged into my old provider most days to see if the balance had been transferred. I got a reassuring email from Simplicity letting me know that yes things are happening but it might take some time, apparently your old provider has 35 days to transfer the funds! That’s working days, so its 7 weeks to get their arses into gear.  Finally on day 13 something actually happened, I was LOCKED OUT of my Kiwiwealth account. Now I know my money is (likely) no longer with them and I’m no longer a client but it seems just a little passive aggressive to delete my login credentials. There wasn’t a “Sorry to see you go email” or even a plea for me to stay. No communication, apparently I’m dead to them now.

What the hell

At lunchtime on working day 15 I got notification from the IRD that they will be forwarding money from my paycheque to Simplicity, yay things are moving along. Meantime no idea where my money is. For 2 days my money has been in the ether, drifting. How do they transfer it anyway? Send a check, money order, bank transfer? Its a mystery.

Resolution

Anyway I got home after work and there was a letter from Kiwiwealth, finally communication! It was a statement of my accounts letting me know how much money would be moving over to Simplicity and that they were sorry to see me go. Thanks guys, I was really hurt when you locked me out. I missed the chance to down load my historical info and how can I geek out on my savings numbers now? Thankfully I had loaded some annual info into a spreadsheet so I can make graphs to my hearts content.

Later in the evening I got an email from Simplicity announcing that my account was active! I logged in and all my cash was there. They did let me know that the deductions from my paycheck were not occurring just yet, but I had the notification from IRD so I know its in the process of being sorted out.

So overall not too painful, 3 weeks of limbo and then bam, all done. Although they legally could take up to 35 days it only took 15, so not super speedy but not terrible either.