Who needs to comply
Anyone offering a KiwiSaver scheme must comply with their obligations under the KiwiSaver Act 2006 (the Act) and the Financial Markets Conduct Act 2013 (FMC Act).
Default providers
When an employee starts a new job, if they do not already belong to KiwiSaver and are eligible, they will be automatically enrolled, unless their employer is exempt from KiwiSaver automatic enrolments.
If an employer hasn’t chosen a preferred KiwiSaver provider, then the employee will be allocated to one of the default providers - see below. Default providers operate under special-purpose terms and conditions covered in documents known as Instruments of Appointment.
Your obligations
All KiwiSaver schemes (other than a handful of restricted-entry schemes) must have:
- a licensed manager who is the issuer for the purposes of the FMC Act; and
- a licensed supervisor whose main function is to supervise the manager.
The core obligations of KiwiSaver providers are set out in the Act and the FMC Act. In summary, these obligations include the need to:
- prepare statistics-based annual returns and lodge these with the FMA
- provide members with annual personalised statements with details of contributions, balances and total fees expressed in dollars (see our methodology notice PDF and our guidance note Fee disclosure by managed funds for how to calculate fees).
- lodge copies of amendments to the trust deed on the Disclose Register
- follow the processes outlined in the FMC Act when a scheme is wound-up
- provide quarterly and annual fund updates
Monitoring and surveillance
The FMA monitors whether KiwiSaver schemes are complying with their obligations. We do this in conjunction with supervisors of KiwiSaver schemes, who take on the main front-line supervisory and compliance monitoring role.
See our KiwiSaver reports for more information about monitoring.
FMA's focus areas
Investments - Managers must exercise care, diligence and skill with investment of scheme assets, and act in accordance with the statement of investment policy and objectives (SIPO). Our guidance note to KiwiSaver Supervisors provides more detail.
Unit Pricing - Unit pricing errors can have adverse implications for investors. We will consider how KiwiSaver scheme supervisors monitor managers' pricing activities.
Disclosure - We will review KiwiSaver scheme offer documents in conjunction with the SIPOs to test whether investment strategies are appropriately disclosed, and disclosure documents are understandable to investors.
KiwiSaver scheme supervisors - Supervisors are crucial to the effective operation of KiwiSaver schemes. We include a focus on KiwiSaver as part of our ongoing monitoring of supervisors. We will also work to clarify our expectations of supervisors for KiwiSaver schemes.
Advice – See our KiwiSaver Sales and Advice guidance. We expect distributors to monitor advice practices and avoid inappropriate customer incentives. We will issue information to consumers on what they should expect and will take action in the event of mis-selling.
Breaches and offences
Fair Dealing provisions under Part 2 of the FMC Act apply, including prohibiting misleading or deceptive conduct and false or misleading representations. It also remains an offence to supply false or misleading information under section 160 of the KiwiSaver Act.
There are a number of other offences set out in the FMC Act, including the contravention of certain Part 4 governance provisions, as set out in section 228. Contravention of these provisions may give rise to civil liability. Part 8 of the FMC Act sets out further civil liability acts, infringement offences, as well as criminal liability offences.
The FMA is able to take action under the FMC Act, including making direction orders, issuing stop orders and infringement notices, and bringing criminal proceedings.
See the FMA's enforcement policy.
Registered KiwiSaver schemes
To find out information about a KiwiSaver Scheme please check the Disclose Register. You can also find a list of KiwiSaver providers on the Inland Revenue website.
Frequently asked questions
View KiwiSaver compliance frequently asked questions here.
