25 Sep 2016

Minister issued warning over KiwiSaver

7:42 am on 25 September 2016

The government warned KiwiSaver providers not to bring the fund into disrepute after it was revealed money was being invested in controversial weapons companies.

A man de-mines a road behind a warning sign at Sri Lanka,in 2009.

A man de-mines a road behind a warning sign in Sri Lanka, in 2009. Photo: AFP

Officials documents show Commerce Minister Paul Goldsmith wrote to all default KiwiSaver providers, saying he expected them all to comply with the law.

Last month, RNZ revealed at least five default KiwiSaver providers were illegally investing in companies making cluster bombs and anti-personnel mines.

RNZ has since reported that all nine default KiwiSaver providers had those kinds of investments, and have since either dumped the investments, were in the process of doing so, or were reviewing their policies.

On the day RNZ's initial investigation was published, the minister wrote to all nine default providers, reminding them of the fund's criteria and ethical standards.

22082016 Photo: Rebekah Parsons-King. Caucas run. Paul Goldsmith

Paul Goldmsith wrote to default KiwiSaver providers, saying he expected them to comply with the law. Photo: RNZ / Rebekah Parsons-King

"The provider is a reputable organisation which has the financial capacity and infrastructure to maintain and enhance the proposition, while pursuing ethical standards that will not bring the KiwiSaver provider into disrepute."

The letters, released under the Official Information Act, showed Mr Goldsmith also warned the providers that he expected them to comply with the country's laws.

Many replied saying they did not have direct investments in weapons companies.

However, several of those providers have since admitted they invested in such firms through a passive fund run by Vanguard, which they have now dumped.

Mr Goldsmith earlier said there was no need to change the law, because providers had been quick in pulling out of such investments.

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