What’s the difference between mysuper and KiwiSaver?
MySuper and KiwiSaver are both retirement savings schemes, but they are tailored for different countries and serve distinct purposes. KiwiSaver is New Zealand’s voluntary retirement savings initiative, designed to help Kiwis save for their retirement, and it offers the flexibility for some to use their savings for a first home purchase. In contrast, MySuper is a retirement savings product in Australia, part of the compulsory superannuation system. Most Australian employees are mandated to contribute to their superannuation accounts, and MySuper provides a straightforward, low-cost default superannuation option for those who prefer not to make specific investment choices.
One of the fundamental distinctions between the two schemes lies in their compulsion. KiwiSaver participation is entirely voluntary, with employees having the choice to opt-in and select their contribution rate. On the other hand, the Australian superannuation system, including MySuper, is compulsory for most employees, who have their contributions managed through their employers. This compulsion ensures a broader coverage of retirement savings among Australian workers.
Moreover, KiwiSaver offers a variety of investment options, with multiple providers managing funds that allow individuals to tailor their investments based on their risk tolerance and financial goals. In contrast, MySuper is characterised by a more simplified approach, offering a limited range of investment choices. It serves as a default option for employees who prefer not to actively select a specific superannuation fund, focusing on cost-efficiency and ease of use.
In terms of regulation, KiwiSaver is overseen by the Financial Markets Authority (FMA) and operates under the KiwiSaver Act 2006 in New Zealand. MySuper, in Australia, is regulated by the Australian Prudential Regulation Authority (APRA) and is governed by the Superannuation Industry (Supervision) Act 1993.
In summary, while both MySuper and KiwiSaver are retirement savings initiatives, they differ in their compulsion, investment options, and regulatory oversight. MySuper is part of Australia’s compulsory superannuation system, providing a simplified default option, while KiwiSaver is a voluntary scheme in New Zealand, offering more flexibility in investment choices and an additional avenue for first-home buying. The rules and regulations associated with these schemes are tailored to the specific needs and preferences of each country.