Woman Takes Complaint to Ombudsman Over Mismanaged KiwiSaver Fund

A woman is seeking intervention from the Banking Ombudsman after discovering that her KiwiSaver was inadvertently placed in a cash fund for over a decade. Amanda Pringle was initially enrolled in the retirement savings scheme by Westpac in 2014, following the receipt of $17,000 in child support payments. It was only this year, prompted by a friend’s advice to review her account, that she learned her investment was not performing as expected.

Pringle found her KiwiSaver account, which had accumulated a balance of approximately $50,000, was situated in a cash fund that returned just 2.8 percent annually over the past ten years. In contrast, the conservative fund she believed she was part of yielded 4.2 percent during the same period. Had she not made an active choice and instead remained in a default fund upon changing jobs, her returns could have been significantly higher, with Westpac’s default fund achieving a remarkable 10.9 percent return over three years.

During her initial appointment at Westpac, Pringle claims the staff member who signed her up did not clarify the differences between available funds. “I trusted that she had my best interests at heart,” Pringle stated. She noted that her limited understanding of financial terminology, exacerbated by an accident in her youth, left her vulnerable to mismanagement of her savings.

Despite increasing her contributions from 3 percent to 6 percent of her income, Pringle expressed regret upon realizing the implications of being in a cash fund. “I was absolutely gutted,” she said, reflecting on how she believed her decisions were aligned with securing her financial future.

Westpac responded to her complaint by asserting that it had followed protocol when assisting Pringle in setting up her KiwiSaver account. The bank indicated that their employees provide information about the different funds but do not offer formal financial advice or make selections on behalf of customers. According to a statement from Westpac, it is the customer’s responsibility to review their investment options and make informed decisions.

“Regular KiwiSaver statements were sent to you over the years which clearly showed that your savings were invested in the cash fund,” the bank emphasized. It also highlighted that customers are encouraged to contact them with any questions or for assistance in reviewing their investment choices.

Pringle maintains that even though she received statements, the lack of personal communication regarding her account’s performance was a significant oversight. “I feel that someone should have reached out to explain the impact of my investment choice,” she said.

Her case underscores broader concerns about financial literacy and the responsibility of banks to ensure customers are fully informed about their investment options. As Pringle escalates her complaint to the Banking Ombudsman, her situation sheds light on the potential pitfalls for consumers navigating the complexities of retirement savings without adequate support.