KiwiSaver changes are now in place

Changes to KiwiSaver have come into effect from 1 July. These changes are now live on Kiwimonster, and will be reflected in all the numbers you crunch.

Government contribution has been halved. Previously, for every $1 a KiwiSaver member contributes (up to a maximum of $1046.86) in a year, the Government put in 50c. The government contribution rate has now been halved to 25c for every $1 contributed, up to a maximum of $260.72 annually.

• High income earners no longer qualify for Government contribution. The Government contribution has been removed for KiwiSaver members with a taxable income over $180,000 per annum.

• KiwiSaver eligibility extended to 16- and 17-year-olds. The Government contribution and employer matching is now available to 16- and 17-year-olds in the workforce.

From next year, default contribution rates increasing. The default KiwiSaver employee and employer contribution rate will be moving from 3% of salary and wages to 3.5% on 1 April 2026, then to 4% on 1 April 2028. Employees will be able to opt to contribute at a lower 3% rate and have that lower rate matched by their employer. Contributions will be reset to the default rate after 12 months, but employees can choose to reselect the lower rate again.

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New Zealanders continue to have a low uptake of personal insurance

New Zealander’s low uptake of insurance is in the news again, with Advice First’s Willie Moala listing some of the reasons why more New Zealanders don’t have personal insurance. Moala considers the kiwi ‘she’ll be right’ attitude, a distrust of insurance companies, price, and the mistaken belief that ACC will cover people in more instances than it actually does, all lead to people failing to get adequate insurance cover.

Last year the Financial Services Council’s Money & You: Managing Risk Through Challenging Times research found that only 41% of respondents had life insurance, 39% had health/medical insurance, 23% had trauma/critical illness insurance and18% had total and permanent disability insurance.

With the Government’s announcement that financial education will be embedded in the curriculum for Year 1 – 10 students, starting from next year, we can only hope this will help change attitudes around the importance of insurance, and in the longer-term help improve NZ’s underinvestment in insurance.

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18 Jun 2025 - APRA has released for consultation a set of minor proposals for instruments relating to section 66 of the Banking Act 1959 (the Banking Act). https://www.apra.gov.au/news-and-publications/apra-consults-on-proposals-for-instruments-relating-to-section-66-of-banking

18 Jun 2025 - Changes coming to modernise ACC regulations, including twelve new additions to ACC’s list of occupational diseases; reimbursement rates increasing for claimants having their ACC decisions reviewed, and for those needing to travel to access ACC covered treatment; the age scale used to assess hearing loss for ACC cover is being updated to align with current international standards. https://www.mbie.govt.nz/about/news/changes-coming-to-modernise-acc-regulations

19 Jun 2025 - The NZ Police Financial Intelligence Unit (FIU) is running free goAML training sessions in Auckland and Christchurch across July. https://www.dia.govt.nz/AML-CFT-Free-goAML-training-in-Auckland-and-Christchurch-this-July-2025

23 Jun 2025 - ASIC Commissioner Alan Kirkland spoke at the Professional Planner Licensee Summit on regulatory priorities in financial advice. https://www.asic.gov.au/about-asic/news-centre/speeches/regulatory-priorities-in-financial-advice/

25 Jun 2025 - The FMA have released The Financial Conduct Report, which will be an annual publication for the financial industry that sets out the FMA's priorities and the drivers behind what they are doing. https://www.fma.govt.nz/library/reports-and-papers/financial-conduct-report/

25 Jun 2025 - The FMA have released episode #14 of ‘5 mins with the FMA’ Podcast - Financial Conduct Report. https://www.fma.govt.nz/library/podcast/5-mins-with-the-fma-podcast-14-financial-conduct-report/

26 Jun 2025 - RBNZ has published a primarily qualitative snapshot that offers a comparison of how banks are working to remove unnecessary barriers to Māori Access to Capital. https://www.rbnz.govt.nz/hub/news/2025/06/snapshot-highlights-banks-efforts-to-reduce-unnecessary-barriers-for-maori

26 Jun 2025 - A ministerial briefing summarising RBNZ modelling outlines three risk scenarios for banks’ ability to meet capital requirements under the Credit Contracts and Consumer Finance Act (CCCFA). https://www.mpamag.com/nz/news/general/129bn-lending-law-risk-threatens-nz-financial-system-rbnz/540506

26 Jun 2025 - The FMA has cancelled Filcare Services Limited’s (Filcare) Financial Advice Provider licence, at its request. Filcare held a full financial advice provider licence, providing financial advice to approximately 1,800 retail clients, many of whom were migrant workers from the Filipino community. Filcare’s cancellation follows the termination of its distribution agreement with Fidelity Life Assurance Company Limited and AIA New Zealand Limited, and the FMA's subsequent inquiry into its affairs. https://www.fma.govt.nz/news/all-releases/media-releases/fma-cancels-filcare-licence/

Asteron Life announce enhancements across Personal and Business Insurance

Asteron Life has announced a suite of enhancements across their Personal and Business Insurance products. All enhancements apply to in-force policies issued after August 2004 and will apply to claimable events from 5 June 2025.

Some of the key enhancements include:

• New support benefits. An example is the new Family Member Accommodation & Transport Benefit which offers up to $300/day for accommodation and $2,500 in travel expenses reimbursed to support a family member during treatment.

• Life Cover with accelerated Trauma Recovery Cover conversion benefit

• Updated definition for major organ transplant, including widening the scope of eligible procedures.

• Updated definition for diabetes, including reducing the threshold for claims from two complications to one.

• New Rehabilitation and retraining Benefit for Business Insurance customers - increased support of return-to-work efforts by reimbursing rehabilitation and retraining costs.

• Increased flexibility to increase cover in line with life or business changes that happen to customers.

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Changes to KiwiSaver announced by Government

The Government has announced a raft of changes to the KiwiSaver scheme, effective from 1 July 2025.

• Default contribution rates increasing. The default KiwiSaver employee and employer contribution rate will be moving from 3% of salary and wages to 3.5% on 1 April 2026, then to 4% on 1 April 2028. Employees will be able to opt to contribute at a lower 3% rate and have that lower rate matched by their employer. Contributions will be reset to the default rate after 12 months, but employees can choose to reselect the lower rate again.

• Government contribution has been halved. Currently, for every $1 a KiwiSaver member contributes (up to a maximum of $1046.86) in a year, the Government puts in 50c. The government contribution rate will be halved to 25c for every $1 contributed, up to a maximum of $260.72 annually.

• High income earners no longer qualify for Government contribution. The Government contribution will be removed for KiwiSaver members with a taxable income over $180,000 per annum.

• KiwiSaver eligibility extended to 16- and 17-year-olds. The Government contribution and employer matching will be extended to 16- and 17-year-olds in the workforce.

The Financial Services Council (FSC) has come out in support of the changes to increase the default contribution rate, and extend contributions to 16- and 17-year-olds. However, they have cautioned that the Government’s decision to reduce its contribution could disincentivise participation in the scheme, particularly for the self-employed. With 40% of members not actively contributing (for example, those on contributions holidays or people in irregular work), halving the government contribution makes it even less appealing for these members to start investing in KiwiSaver again.

Kiwimonster is evolving with KiwiSaver

We’re updating our tools to reflect the new KiwiSaver rules—including contribution increases and reduced government top-ups—so you can continue to deliver great advice, confidently.

While the new rules aim to increase participation, they don’t do enough to support the 40% of KiwiSaver members who aren’t actively contributing. That’s where Kiwimonster can help.

Even for those not currently contributing, Kiwimonster enables advisers to project future retirement outcomes. For example:

• Self-employed clients – whether or not they’re making regular contributions.

• People on a break – such as those on parental leave or overseas on their OE.

Using existing balances, advisers can still create meaningful forecasts—giving clients clarity, even if they’re pressing pause on contributions.

If you would like to find out how, give us a call.

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25 May 2025 - The FMA operational allocation rose from about $71.3 million in the previous fiscal year to almost $78 million for the 2025/26 budget period. https://investmentnews.co.nz/investment-news/fma-wins-6-7m-pay-rise-on-compliance-enforcement-upgrades/

28 May 2025 - Minister of Commerce and Consumer Affairs, Hon Scott Simpson, April 2025 diary released with the following potential financial services sector related meetings noted:

• 2 Apr 2025 – MEET: Kiwibank (Steve Juravich)

• 3 Apr 2025 – MEET: Financial Ombudsman (Susan Taylor, Jane Meares)

• 3 Apr 2025 – MEET: Commerce Commission Review Panel (Paula Rebstock,Allan Fels, David Hunt)

• 3 Apr 2025 – MEET: Chair of ACC Board (Dr Tracey Batten)

• 7 Apr 2025 - ATTEND: Financial Services Council Roundtable (invited guests)

• 8 Apr 2025 – MEET: ACC Board (ACC Board)

• 10 Apr 2025 – MEET: FMA (Samantha Barrass)

• 14 Apr 2025 -MEET: Commerce Commission (Commerce Commission)

• 15 Apr 2025 – MEET: ACC Officials (ACC, MBIE, Treasury Officials)

• 15 Apr 2025 – MEET: MBIE Officials (MBIE Officials)

• 17 Apr 2025 – MEET: Chair & CE of ACC (Dr Tracey Batten & Megan Main)

• 23 Apr 2025 -MEET: MBIE Officials (MBIE Officials)

• 29 Apr 2025 – SPEAK: Financial Services Leaders Roundtable (Invited Guests)

• 29 Apr 2025 – MEET: ACC Board Chair (Dr Tracey Batten)

• 30 Apr 2025 – MEET: AIA (Nick Stanhope)

https://www.beehive.govt.nz/sites/default/files/2025-05/Proactive%20Diary%20Release%20Simpson%20Apr%202025.pdf

29 May 2025 - The FMA releases Good Cents: Kiwis on savings and debt research, which looks into New Zealanders' attitudes and behaviours towards savings, debt reduction, and financial guidance. https://www.fma.govt.nz/news/all-releases/media-releases/good-cents-kiwis-on-savings-and-debt-research/

Fidelity Life welcomes record number of advisers to Career Connect programme

Fidelity Life has announced the fourth intake of its adviser programme, Career connect, for new advisers. This year sees the programme expand to welcome its largest cohort to date - 30 emerging advisers. The company will also soon invite adviser businesses to join the Career connect registry; to signal their interest in offering work experience opportunities to newly qualified financial advisers. 

Submissions this year attracted greater diversity, , with 56% of applicants under the age of 35, 62% coming from female applicants and just under 30 ethnicities represented across the more than 70 applicants.

The Career connect programme awarded eight scholarships this year, up from seven last year, with each valued at up to $5,000. The recipients of the 2025 Career connect scholarships are:

• Grace Leaso, Auckland - Kōwhai scholarship (for an outstanding Pasifika applicant)  

• Grace Shearer, Hastings - Toe Toe scholarship (for an outstanding young applicant aged 21-25)

• Jada Mandery, Auckland - Women in Finance scholarship (supported by Kaplan Professional)

• Marcel Stenning, Auckland - Pāua scholarship (for outstanding applicant demonstrating excellence)

• Michelle Andrews, Auckland - Women in Finance scholarship (supported by Kaplan Professional)

• Milly Elworthy, Mosgiel – Rural scholarship (supported by FMG) 

• Olivera Vasic-Wooller, Auckland - Rāngi Po scholarship (for an underrepresented community in financial services)

• TK Buchanan, Christchurch - Pounamu scholarship (for an outstanding Māori applicant)

Fidelity Life Head of Solutions Michelle Doyle said

“By taking part, advice businesses play a vital role in mentoring fresh talent… It helps new advisers gain industry experience and build confidence as they transition into the profession.” 

The 2025 cohort of 30 will start their journey this week. Over the next six months, they’ll take on part-time study to earn their Level 5 qualification through Kaplan Professional. Fidelity Life will host a graduation ceremony early next year to celebrate their accomplishments.  

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8 May 2025 - A number of amendments to New Zealand's Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) regime are set to take effect on 1 June 2025. 3 Key Changes Impacting FAPs

1. Mandatory Customer Risk Rating

2. Enhanced Due Diligence for Low-Risk Trusts

3. Extended Reporting Timeframes

12 May 2025 - The FMA are to pilot a Financial Advice Regulatory Panel. The purpose of the Panel is to provide industry perspectives to the FMA on issues related to financial advice in New Zealand. The Panel will serve as a sounding board for how the FMA regulates the industry, including supporting good practice and ensure the FMA continue to regulate financial advice in a fit-for-purpose way. The FMA have approached key industry associations for nominations. https://www.linkedin.com/posts/financial-markets-authority-new-zealand_financialadvice-regulation-fma-activity-7327528052719083520-BD0y?utm_source=share&utm_medium=member_desktop&rcm=ACoAAAwmg70BxdkhEtiDz1U0ui17rIBWTv3T_Es

14 May 2025 - On 21 May 2025 the RBNZ will be launching the Tara-ā-Umanga Business Expectations Survey (BES), publishing results for the June quarter.

14 May 2025 - The Credit Contracts and Consumer Finance Amendment Bill had its first reading in Parliament. https://bills.parliament.nz/v/6/6193a33c-40d6-4354-0d5a-08dd6ff875cc?Tab=history

14 May 2025 - The Financial Markets Conduct Amendment Bill had its first reading in Parliament. https://bills.parliament.nz/v/6/8c9fe069-724a-4200-0d58-08dd6ff875cc?Tab=history

15 May 2025 - The RBNZ has published a Bulletin article which discusses the barriers Māori face in accessing capital that may be associated with market failures or imperfections. https://www.rbnz.govt.nz/hub/news/2025/05/examining-maori-access-to-capital-market-failures

Munich Re look at improving Cancer outcomes

As part of Munich Re’s Life Science Report 2025, they have investigated the projected impact of advances in cancer treatment and research. These advances will change how cancers are defined, prevented, diagnosed and treated and are expected to significantly improve cancer mortality.

Cancer is the leading cause of death among policyholders for most insurers worldwide, as such it demands investigation. Much progress has been made in the past couple of decades to improve cancer mortality, through both reducing cancer risk factors (such as the dramatic downturn in tobacco use) and better diagnosis and treatment. Mortality improvement trends are expected to accelerate as our understanding of cancer genetics are combined with artificial intelligence (AI).

AI will be used to both improve cancer risk prevention and diagnostics. AI analysis of an individual’s personal information such as health data, family history, genetic and epigenetic profiles, microbiome, living environment and exposure history, sometimes called a statistical biopsy, will give a better understanding of risk for a wide range of cancers. This could potentially allow for a personalised approach to risks, behaviours, and identification of which strategies may be most effective in addressing these factors.

Being able to diagnose cancer more accurately, and at earlier stages, should improve cancer mortality. AI has already led to refinements in imaging studies, and in blood, urine and tissue samples. AI can also be used to analyse the tumour’s genetic pattern, other associated biomarkers and an individual’s risk profile to allow for better prognosis and management approach. AI’s ability to recognise patters not apparent to humans will help with diagnostic tools such as imaging studies, pathologic specimen interpretation and photograph analysis.

More effective screening approaches will lead to earlier cancer diagnosis and improved cancer mortality. An important technology, ‘liquid biopsy’, is currently used to analyse fluids to look for markers indicating the presence of a cancer, typically used to detect residual cancer after treatment or recurrence. If a liquid biopsy test that can screen for multiple cancers in asymptomatic individuals could be brought to market at a price point where it is accessible to the masses, it would be a game changer. Though it would also raise concerns about over-diagnosis and surveillance bias, as some identified cancers may never post a significant mortality risk.

The combination of AI and genomic analysis of tumour cells and immune cells has led to the development of targeted treatments that exploit specific genetic patterns. These treatments are more precise and safer than chemotherapy, with the four key categories of therapies emerging being targeted monoclonal antibodies, immune checkpoint inhibitors, cancer vaccines and adoptive cell immunotherapy.

With potential changes in how cancers are classified, product definitions will need to be modified. Instead of being classified based on their tissue of origin, it’s expected new cancer tests will be able to categorise cancers based on their underlying genetic causes – potentially leading to thousands of cancer subtypes.

Where previously terminal cancers become able to be managed and instead turn into chronic disease, there may be implications for living benefits products. Reduced mortality should be favourable for life insurances businesses, though the costs of more sophisticated, individualised cancer treatments may have a negative cost impact on health insurance businesses. Munich Re predict that advances in diagnosis and changes in diagnostic criteria are going to increase cancer incidence rates in the short term, but may decrease critical illness rates if major advances in cancer prevention are realised.

AI will also have implications for underwriting. AI-based diagnosis is likely to be more accurate and predictive than current methods, with fewer false positive and false negative results, enabling risk to be better assessed. Better monitoring post-cancer treatment will mean recurrence risk can be more accurately assessed too.

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AIA release Claims Compass Report

AIA have released their second Claims Compass Report, covering data for the year ended 31 December 2024. AIA have over 797,000 Kiwi protected and accept 92% of all claims received.

In 2024, AIA paid out $829.6 million in claims, up $95 million on the previous year. Life accounted for 41% of all claims paid ($298.1 million), followed by Health ($167 million), Trauma ($139.5 million), Income Protection ($97.2 million) and Total Permanent Disablement ($23.9 million).

Life claims were up $34.6 million, Health claims were up $23.9 million and Trauma claims were up $22.4 million on the previous year. Increases in claims were put down to the combined impact of insurance levels increasing alongside inflation, more innovative treatment options with higher costs than established treatments, and growing demand for health services due to an aging population and growth in chronic diseases.

AIA NZ Chief Customer Officer, Maddie Sherlock said

“In New Zealand, we have observed increased rates of heart disease, cancer, diabetes, and poor mental health, brought about by worsening lifestyle factors such as diet and lack of exercise. These worsening public health trends lead to a higher demand for health services, which puts upward pressure on private health claims.”  

AIA have shone a spotlight on mental health. In 2024 $25.7 million was paid out towards mental health related claims, and $8.1 million for suicide claims. Mental health claims were highest for men aged 40 and 49 ($6.4 million), followed by men aged 50 – 59 (5.6 million). Sherlock said

“This big jump in claims for this age group reflects their life stage which is likely to be impacted by the weight of increased family, financial and professional responsibility and high demands upon their time.”

“This is the age where your overall health starts to be impacted by your nutrition, sleep and activity levels versus when you were younger. And your risk of lifestyle diseases increases. These changes can of course impact your confidence and overall mental wellbeing.”

The top AIA NZ mental health claims in 2024 were:

1. Depressive disorders 44%

2. Anxiety / panic disorders              14%

3. Post Traumatic Stress Disorder      4%

4. Chronic Fatigue Syndrome           3%

5. Chronic Pain Syndrome                2%

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