Kiwisaver pension plan provider, NZ Funds Management, is receiving Bitcoin even though other New Zealand funds think it could be a precarious move.
A New Zealand pension fund is entering the Bitcoin market, paving a new way for retirement fund initiatives worldwide. According to a news outlet Stuff report, the growth fund NZ Funds Management of the KiwiSaver plan has converted 5% of its capital into Bitcoin.
New Zealand counts on a mixed pension system, where the national corporate welfare system, called Kiwisaver, plays a vital role.
The Kiwisaver savings plan allows New Zealand workers to voluntarily place a percentage of their monthly salary, a minimum of 3% and a maximum of 10%, in a pension fund.
Generally, employees get automatically enrolled when they obtain a new job, and the contribution gets deducted from their salary at the end of the month. Typically, those who opt for the Kiwisaver plan can access their savings only after age 65. They can also use them as a deposit.
New Zealand Pension Fund Takes a Step towards Crypto
Like many other countries, some companies serve as providers of the Kiwisaver plan. These companies lead the taxpayers’ wealth, creating profitable incomes on their savings through investment in financial products. There are also various types of funds that offer different percentage returns according to needs.
Among the Kiwisaver plan providers is NZ Funds Management, a New Zealand company with 30 years in the market that has chosen to incorporate Bitcoin into its investments. As reported by the local media, NZ Funds changed its offering documents in October to invest in cryptocurrencies for the first time.
The investment director of NZ Funds, James Grigor, highlighted that the company, which had investments worth just over USD 350 million by the end of December – has about 5% of its money in bitcoins.
Despite NZ Funds Management joining the digital asset market last year, other Kiwisaver providers don’t show a bit of interest in the following suit. In its report, Stuff interviewed the directors of additional pension funds who stressed that they did not find healthy investing in cryptocurrency as safe.
Among them, David Beattie, director of the pension fund Booster, said that the provider had no plans to invest in Bitcoin as it was “too speculative” an asset. “At this stage, we would say ‘no’ because it is an investment that does not demonstrate risk-return properties that are acceptable from our point of view.”
Sam Stubbs, CEO of KiwiSaver’s Simplicity scheme, commented along the same lines: “I believe that Bitcoin within KiwiSaver equates to gambling, not investing. It amazes me that any KiwiSaver manager considers it a legitimate asset class. “
For Grigor, Bitcoin has been going through “legitimation,” driven by the recent institutional investment that has positively affected the asset’s prices.
KiwiSaver’s CEO highlighted that last year, they obtained Bitcoin at an average of USD 10,000 per unit, and this year they stated that capital had multiplied by six. The executive did not disclose the exact amount invested by the firm.
By: Jenson Nuñez
