kiwisaver, investing

Employment restricted KiwiSaver schemes - are they worth joining?

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Most KiwiSaver schemes are open to the general public. Anyone that is eligible to join KiwiSaver can invest their KiwiSaver money with most providers.

However, did you know that some KiwiSaver schemes restrict who can join them?

In this blog post, we’ll be talking about employment restricted KiwiSaver schemes. We’ll talk about what they are, what all three of them offer, and whether you should join one or not.

So let’s dive right into it.

What are employment restricted KiwiSaver schemes?

Unlike the offerings of most KiwiSaver providers, not everyone can join an employment restricted KiwiSaver scheme.

They restrict who can join based on where a person is employed, or what their profession is. For example, one may be set up for those that work within a certain organisation, industry or profession.

There are even examples where students of a particular profession can join a restricted KiwiSaver scheme.

These offerings can also be considered as in-house KiwiSaver schemes.

This is to say that different providers have different criteria regarding who can join them.

Sometimes, these schemes give extra benefits for those that join them. This can act as an incentive to enter and stay with a particular provider. 

However, one needs to keep in mind something. You should not automatically go with the provider that gives you the most “bonuses”. Instead, you need to consider more than just the incentives that these entities offer.

We will talk about three examples of employment restricted KiwiSaver providers in this post:

  • New Zealand Defence Force KiwiSaver Scheme

  • Supereasy KiwiSaver Scheme

  • Medical Assurance Society KiwiSaver Scheme

1. New Zealand Defence Force KiwiSaver Scheme

The NZ Defence Force KiwiSaver Scheme is open to New Zealand Defence Force (NZDF) members or members of the New Zealand Defence Force community. The NZDF community includes past and current members and veterans, as well as partners, children, and close relatives to a current or past NZDF member.

There are a few advantages offered to some members of their scheme, and which may apply to you.

  • NZDF members (and not anyone else in the NZDF KiwiSaver Scheme) who contribute money to KiwiSaver will receive a $1,000 payment (before-tax) on the first, fourth and seventh years of contributions.

  • For those working with the NZDF, the NZDF generally offers an employer contribution of 4% of your before-tax salary or wages to your KiwiSaver.

  • “Rewards totalling $50,000 will be awarded to members of the NZDF Saving Schemes each year.” This is done by giving out participation rewards, but there are rules as to who is eligible for this. 

Note: The quotes and information above have been collected from the NZ Defence Force KiwiSaver Scheme Booklet. Feel free to read this booklet if you wish to learn more about the NZ Defence Force KiwiSaver Scheme.

It is important to acknowledge the incentives that some providers offer. However, just because these incentives exist, does not mean a scheme is best suited for you. 

One must take into account all the different characteristics of a provider, not just a few of them. This means also considering aspects like returns, the management of their scheme, fees, and your personal situation.

2. Supereasy KiwiSaver Scheme

Supereasy is a KiwiSaver scheme set up for those that work at local government.

People that work at the local government are basically people that work at a regional council, city council, or district council. Additionally, this includes people that work at other council controlled organisations. From those who work at your local council library to those who have been elected as officials on council boards.

Supereasy also allows immediate family members of council employees to join their KiwiSaver scheme. This means if a person works at a council, their spouse, civil union partner, de facto partner, parent, child, step-parent or stepchild can join the Supereasy KiwiSaver scheme too.

There are a few further exceptions for others who can join the scheme, which are covered here

One of the main products Supereasy offers is an “automatic fund”. This is basically a glidepath fund which adjusts where your money is invested based on your age. If you wish to read more about glidepath funds, click here.

Supereasy also offers the usual array of fund types such as a growth fund, a conservative fund, a balanced fund, and an aggressive fund.

Unlike some providers, Supereasy isn’t tied to any fund managers. For example, the NZ Defence Force’s scheme is tied to Mercer.

3. Medical Assurance Society (MAS) KiwiSaver Scheme

The Medical Assurance Society (or MAS) is the largest restricted KiwiSaver scheme out there. 

With around 14,000 members and $750 million under management, they are significantly bigger than any other restricted KiwiSaver provider.  Besides KiwiSaver, the Medical Assurance Society offers other services, such as insurance.

The Medical Assurance Society has a rich history. They were founded in 1921, around 100 years ago, for doctors.

When it comes to their KiwiSaver scheme, the Medical Assurance Society’s name is a bit misleading. This is because, despite their name, professionals outside of the medical industry can join their scheme.

In fact, the Medical Assurance Society’s criteria for those who can join is quite long. It allows people such as veterinarians, doctors, dentists and immediate family members of these people to join their scheme. 

Also, people studying to be a veterinarian, doctor or dentist, as well as engineers, lawyers, architects, accountants, dentists can join too. 

The Medical Assurance Society offers seven different funds as of writing: a Global Equities Fund, an Aggressive Fund, a Growth Fund, a Balanced Fund, a Moderate Fund, a Conservative Fund, and a Cash Fund.

If you’d like to read more about the Medical Assurance Society’s KiwiSaver scheme, click here to do so.

The verdict - should you join an employment restricted KiwiSaver scheme?

Well, it depends.

To figure out which KiwiSaver scheme is right for you, you should consider all the other providers out there. All of them have different offerings, different advantages and suit some people better than others. Some KiwiSaver schemes specialise in areas such as ethics or religious concerns, for example. 

Additionally, when choosing a KiwiSaver scheme and fund, one should take into account factors such as returns required, volatility tolerance and management style of the fund. This way, one can be confident they have considered everything they need to in order to make an informed decision.

There is no one single answer for this question.

There are over 30 different KiwiSaver providers out there. As a result, it is best to have organisations like us who have done hours of research to tell you what to do with your KiwiSaver money.

This is why you should submit our KiwiSaver HealthCheck.

Our KiwiSaver HealthCheck gives you the opportunity to receive free financial advice over the phone. This phone call will allow you to find out which KiwiSaver provider and fund is most suited for your personal circumstances.

The first step to receive our recommendation is to fill out our form. Don’t worry - it’s not a complex test or anything like that and there are no right or wrong answers.

All we want to do is get a picture of your financial situation to be able to form our recommendations. 

The next thing for you to do is schedule a time to talk with one of our financial advisors. This can be done immediately after filling out the form. You can choose from a wide range of times and find one that suits you best.

The third step is that you turn up to your phone at your appointment time and take advantage of our free advice. Additionally, if you have any questions, feel free to ask them as well. Our financial advisors will be happy to answer them for you.

And the last thing to do is decide whether you’d like to implement the advice we give you. If that’s something you’d like to do, we can help you with that. And if not, that’s perfectly fine. You are free to choose not to take our advice.

Did I mention that this is all for free? This means you don’t have to pay anything to get advice from us at National Capital. And this makes getting advice from us easy and accessible.

So what are you waiting for? Fill out our KiwiSaver HealthCheck, and find out which KiwiSaver provider is best for you today.

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Are you with the right KiwiSaver provider for you? Find out by taking our free KiwiSaver HealthCheck!

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