BNZ Wellington. - Photo: RNZ / Alexander Robertson
The Bank of New Zealand has contracted out the mangement of some of its KiwiSaver investments to a United States firm, allowing it to drop fees.
The bank will scrap its $1.95 monthly member fee from today and reduce the cost of managing its more risky funds.
Fees for its moderate, balanced and growth funds will fall from 0.9-1.1 percent to a flat 0.58 percent.
BNZ chief customer officer Paul Carter said Vanguard Investments, one of the world's biggest investment fund managers, would pick up the management of its international assets, freeing up its resources to manage investments in New Zealand and Australia.
"Using an index approach makes particular sense in our view on global equities and bonds.
"We will reduce the cost there and pass those benefits on to members."
He said the changes eased the bank's concerns about New Zealanders lacking retirement savings.
Research BNZ commissioned found 55 percent of the public were concerned they would not have enough money to retire, with those aged 30 to 49 the most worried.
Mr Carter would not put a cost on the changes, but said it would cause BNZ's revenue to fall in the short-term.