Today it has been reported that New Zealand Commerce Minister is looking at fast tracking legislation to "ensure the integrity of the investments of the 1.3 million people who have $4.88 billion of their money invested in the kiwisaver scheme".

WHAT!!!!!!!! That sounds a little concerning for those of you that have bought into this scheme designed primarily to boost the governments / economies perfromance by giving "them" some more working capital to "invest" - or rather shuffle around etheric cash on the global commodities market. A simplistic view perhaps?
Is this whole "give me a dollar so I can lend out 20 and make loads of interest off it" the  reason why the western worlds collective economies have fallen over?
Have the western world's house of cards economies really recovered or just been propped back up with the same old cards that have been bent back into shape?

For those of you that have ever knocked your house of cards over and stepped on one or two of them, then had to reuse those once bent cards, you know that sinking feeling as the stack gets taller and taller. You just hope that those bends hold out, but you know in the pit of your stomach that once there is a bend it will never be as strong again.

From the NZPA article this morning

"Huljich Wealth Management has brought the spotlight on KiwiSaver account management after it failed to disclose that its then-managing director Peter Huljich had injected cash into the funds because it had not performed well.

Mr Huljich said he felt morally responsible for the investment decisions, but others said it was to give a false impression about the funds' performance. The Securities Commission was investigating.

Australian investment research company Morningstar Australasia has also warned KiwiSaver investors to look closely at their providers, saying there was a very poor disclosure regime in New Zealand.

"In recent weeks there has been growing concern regarding the regulation of KiwiSaver schemes. Mum and dad investors must have confidence that their money is being well managed," Mr Power said."

This is odd. Wasn't the whole point of kiwi saver meant to be about setting aside money for use when you retire? Surely it is not actually about exposing even more middle New Zealanders to unbelievable risk given the global financial economic climate? It is also interesting that those enlisted into the Kiwisaver scheme are being called "kiwisaver investors" in the article.

And then this wee bombshell to the average kiwisaver investor who thought they were just setting aside money for retirement like an old fashioned super fund (which is also subject to market forces but lets not go there).....

"It must be remembered that though KiwiSaver was set up by government, risk is inherent in investment decisions, and those investments are not guaranteed by government. These changes are designed to plug gaps in regulation which frankly should have been addressed when KiwiSaver was set up," Mr Power said."

Cool. What happens if the investments continue to fail to perform? What happens if some of them fall over? Does the government then provide those affected parties with replacement funds or means to fund ones retirements? One thinks not. Given what has happened lately to some of even the bigger global investment companies, I would imagine that there ought to be some folks out there with a little perspiration on the top lip.

All I can be thankful for is that the scheme hasn't been running for too long so the overall risk and impact to individuals will not be so great if providers topple. What will the story be in 10 or 20 years though? Will those fraudulant managers of the funds still get away with everyones money, most of their assets in trusts and untouchable, and a little slap on the wrist and a meagre fine like they do right now?
If there is anything to be learnt over the past 18 months it is that the trust funds that get into trouble are in trouble well before most everyone else knows, and those reasonable line their pockets before bailing, then cry hardship as they have sunk some of their own personal wealth into the companies too. There is a big difference for most people between propping up a company with invested capital and investing your life savings. One is a calculated risk, the other is a make it or break it situation. What will become of some of these older, already retired investors that have lost all of their savings once the media hype dies down?
And wasn't the pension meant to provide us with a reasonable standard of lifestyle in our golden years after all of those years paying up to 40% tax anyway???????