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Simplicity KiwiSaver review: A nonprofit fund manager
With 100% transparency, conscious investments and low fees, find out what makes the Simplicity difference.
Updated . What changed?
Boasting to have the fastest growing KiwiSaver scheme in New Zealand, Simplicity is a not-for-profit company that operates 100% online, so you don’t need to worry about unnecessary costs and commissions. With over 3,000 investments in 23 countries, Simplicity funds are fully diversified and 15% of fees go toward supporting New Zealand charities through the Simplicity Charitable Trust.
Investments are consciously made, so your funds will not be going into businesses that operate in the tobacco, alcohol, adult entertainment, weapons, gambling or nuclear energy industries.
Many well-known New Zealand businesses have chosen Simplicity as their company KiwiSaver provider, including The Warehouse, Spark, Meridian, Z, Foodstuffs and Contact.
If you’re looking to join KiwiSaver for the first time or are wanting to switch from your current provider, read on to find out if Simplicity is right for you.
Fund types and performance
- Fossil fuel extraction
- Gambling and casinos
- Military weapons
- Civilian firearms
- Nuclear power
- Adult entertainment
- Growth – The Growth fund comprises investments in growth assets (such as shares), with limited exposure to income assets. The value can fluctuate more than other fund type, but higher returns are possible over longer investment periods.
- Balanced – Although it will fluctuate more than the Conservative fund, the Balanced fund will likely provide better returns over a period of 10 years or more. It has a mix of income-earning investments and growth investments.
- Conservative – The Conservative fund keeps most investments in fixed-income investments like fixed interest, with only little exposure to growth assets. The investment value is more stable over the long term, but gives a lower return than the Growth or Balanced funds during that period.
- Guaranteed Income – Once you turn 60, you can switch to this fund, with the guaranteed income starting when you turn 65. Containing a mixture of income assets and growth, this fund is predicted to have more fluctuation than the Conservative fund, and a likely lower return than the Growth fund over 10 or more years. On retirement, the Guaranteed Income fund provides investors with a regular income of 4.2% for life, no matter what the market does and even if their original investment runs out.
What are the fees?
As Simplicity is a not-for-profit KiwiSaver plan, you’ll only be charged what it costs to manage your account with no hidden commissions or fees. This means a membership fee and a 0.31% investment fee. Your yearly membership fee is $20, and then $3.10 for every $1,000 you have saved.
These fees stay the same for all fund types except for the Guaranteed Income fund, which also includes a yearly 1.25% fee for the insurance to guarantee your income.
There is no membership fee for children under 18.
You can find out how much extra you can get by using the simple calculator on the Simplicity website. Just enter your age, salary and current KiwiSaver balance if applicable.
What other products does Simplicity offer?
As well as KiwiSaver funds, Simplicity has the following products:
Simplicity’s investment funds have the same fees as KiwiSaver funds and the same diversified investments. If you’re looking for a lower management fee, you can invest in NZ Share and Bond funds.
With a floating interest rate of 2.50% at the time of writing, Simplicity currently offers NZ’s lowest cost first home loan.
If you’re buying your first home, have been with Simplicity for at least one year and in KiwiSaver for at least three, you will be eligible to enter the monthly ballot.
If you are chosen and your loan application is successful, you’ll have six months to find your first home. Simplicity home loans have no early repayment fees, so you won’t be penalised if you are able to pay your loan off sooner than your loan term.
How do I join Simplicity?
Joining Simplicity takes just two minutes.
Just click on the ‘Join’ button on the top right corner of the website and fill in your personal details and IRD number. You can then choose a fund type out of Conservative, Balanced, Growth or Guaranteed Income.
Next, enter your PIR Rate of either 10.5%, 17.5% or 28%. Lastly, upload a copy of your driver’s license or passport. If you’re signing up for children under 18, a copy of their birth certificate is required as well as your identification.
- Be a NZ citizen or entitled to live in NZ indefinitely
- Living in New Zealand
You’ll only need your IRD number and a passport or driver’s license to sign up. Simplicity will take care of the rest.
If you’re looking for a KiwiSaver provider that makes conscious investments and has 100% transparency, Simplicity is worth considering.
Operating completely online and being not-for-profit means that you won’t be paying more than you should for your KiwiSaver plan. Sign up is easy, and you have your choice of four different fund types. And when it comes time to buy your first home, you may be selected to apply for low-cost first home loan.
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