Q&As
$3,000 for you!
QI was in business for about 25 years. During that time several people owed me money, either having borrowed it or been told by the courts that they had to pay it.
Some debtors were very good at repaying their borrowings. But Court reparations usually stopped soon after the first few payments. Dishonest people just moved address and never told anyone.
One day, I rang Collection Services to inform them of my new bank account details. To my surprise they said, “We have $3,000 sitting here waiting for you!” A former employee who stole my fuel card and managed to syphon off $23,000 of petrol within three weeks before I could stop him, was charged and found guilty. He spent 30 months in jail. Then he started repaying the debt.
That was 13 years ago. He is still repaying it and has repaid about 80%. Amazing, as I had long ago given up any hope of ever receiving anything!
My suggestion is check that Collections has your up-to-date bank account details, phone number, physical address, and email address.
AThe Ministry of Justice says “amen” to that! I asked them how the system works.
“A judge can make a reparation order, and determine its value, when an offender is being sentenced. This order will outline how reparation is made — either immediately, or they are given 28 days to make full payment, or to have a payment plan in place,” says Tracey Baguley, national service delivery group manager.
“When this doesn’t happen, the court may take enforcement action such as wage or bank deductions, an offender’s property can be seized, or their driver’s licence can be suspended.”
When reparation is ordered, the court gets contact and bank account details from the victim. “In some instances, collecting reparation can take time, especially if the offender is serving a prison sentence. It is important for people who are owed money to keep their contact and banking details up to date.”
Baguley adds, “Victims are our priority, and therefore enforcing these judicial orders is critically important.”
So how does the ministry track down people who stop making payments?
The ministry “has automated data matching programs with other government departments (such as the Ministry of Social Development and Inland Revenue) and third-party agencies,” says Louisa Carroll, acting national service delivery group manager.
Through these programs, Collection Services gets information — such as address, phone number and employer details — of people owing fines or reparation.
“Other methods the court will use to try and find people and encourage them to make payments are:
- “Contacting them through text, email and letter.
- “Automatic number plate recognition (ANPR) technology. Bailiffs are currently trialling ANPR handheld devices to identify vehicles linked to individuals with outstanding court fines and reparations.
- “Preventing international travel — Issuing an alert at the border. If a person is stopped at the border they are given the chance to pay their fine or reparation. If they do not pay, the Police may arrest them and prevent them from travelling. If this happens, they will need to appear in court.
- “Enforcement action — which can include deducting money from their wages or benefit, issuing warrants for the seizure and sale of the offender’s property or issuing a warrant for arrest.
“The above options are dependent on the information available to the court and their ability to locate and contact the offender, and their ability to pay. Information may be provided from the offender themselves, through data matching programs with other government agencies, or from victims.”
That’s quite an impressive list — or a scary one, depending on your perspective.
I’m left with one more question, but not for the Ministry: What did your employee do with that much petrol?!
Go for it!
QWe are a married couple aged 77 and 79, both retired. We have a modest mortgage-free home, plus a mortgage-free holiday home worth about $750,000. We are using that less and less. We also have about $400,000 in an investment fund returning about 4%.
The investment income plus NZ Super just covers our outgoings, with nothing left over for local or overseas trips, or the occasional lump sum such as car repairs etc.
We had a business fail over 25 years ago and lost pretty well everything, so both of us, especially my wife, are understandably very risk averse.
On the other hand we would like to be able to enjoy our retirement and can’t decide whether to just grin and bear it, or look at alternatives such as a reverse mortgage etc to provide some additional cash flow. Any suggestions?
AI can understand your risk aversion. But grinning and bearing it is absolutely not necessary.
There’s nothing risky about selling your holiday home. If you’re not using it often, that suggests it’s not a place you love so much you can’t let it go. And with $750,000, minus selling expenses, freed up, you can rent many lovely holiday places — all around the country and elsewhere — and still have heaps over for further travel and big expenses.
You’ve also got other options, should you suddenly need more money:
- Spend more than just the income in your investment fund. It’s fine to eat into the capital too.
- Get a reverse mortgage. At your ages, it’s a low-risk step to take because — to put it bluntly — the interest probably won’t compound for more than a couple of decades!
- Look into an alternative, called home reversion. Learn more about this, and compare it with a reverse mortgage, at equityrelease.co.nz.
Some would say this is not a great time to sell the holiday home, with prices down from a few years ago. But nobody knows whether prices will head. And in the meantime, you two are missing out on fun while you’re still healthy enough to make the most of it.
Spring is a good time to put a holiday home on the market. Go for it!
Duds to avoid
QAre some KiwiSaver funds that have not performed across the years just duds to avoid?
I agree with the point you make repeatedly not to look at past results of KiwiSaver funds as an indication for their future. But can past results indicate that the fund is a complete dud?
In Australia, some superannuation funds turned out to not perform year after year, something acknowledged even by the regulator.
Would that not be the case here, too, that some funds just don’t perform and — consequently — are best to avoid?
AYes, I’ve often suggested ruling out funds — in or out of KiwiSaver — that have performed badly for years. Quite simply, they may be badly managed.
I also suggest, though, that you first compare a fund’s performance with other similar funds. Maybe the whole sector has had a bad run.
You can easily make comparisons using the Smart Investor tool on sorted.org.nz. Click on the fund and scroll down to the Returns section for a graph showing its performance over the last ten years — or less if it’s a newer fund — compared with average returns of all funds at a similar risk level. These graphs also show, at a glance, how volatile the fund is.
“What irks me …”
QI too was an investor in Kernel’s Kensho Moonshots Fund, which was closed recently.
I refer to your statement in last week’s column, “But really, in the end, the problems that arise from a fund closing are not usually major.”
Well, if losing two thirds of your investment capital isn’t major, I don’t know what is. What irks me the most (besides losing my money), is that Kernel provides a suggested minimum holding period for each of their funds. The suggested period for this fund was 7 to 10 years.
You quote Kernel CEO Dean Anderson saying “despite being available for several years, they simply weren’t resonating with enough of our investors”. In actual fact, the fund’s unit price tanked shortly after it was sold to investors and never recovered. It is hardly surprising investors weren’t interested.
Moral of the story — stay away from small satellite funds.
AI wouldn’t necessarily say to avoid such funds. But I would say, “Don’t put a large portion of your savings into any specialised fund. Either invest in a wide range of these funds, or simply choose one or two widely diversified funds, such as global share funds.”
Kernel Wealth confirms that the Moonshots fund — and the Kensho Electric Vehicles Innovation Fund, which they also closed in June — recorded large losses in recent years. Both funds had a risk rating of 7, the highest score, which means this will sometimes happen. But it must have been hard to watch.
Kernel also says, “the minimum suggested timeframe is a piece of information that is prudent for us to provide customers to assist them decide whether a fund/investment strategy is appropriate for them.”
However, it adds, “It is not a commitment to maintaining a fund as open.” And Dean Anderson pointed out last week that it’s common for funds to close. Over the last 15 years, half of New Zealand-based NZ share funds and two thirds of our global share funds were closed.
When a fund closes, as I said last week, it doesn’t need to be a big deal, as long as you move to another fund that makes similar investments. You’re selling and then buying in the same market.
In the info Kernel sent to investors, it listed some similar options, and offered to help people transfer their money. Says a spokesperson, “Whilst there is not another PIE fund available from NZ offering the same strategy, there are other investment providers (ETFs) that would have enabled customers to maintain a similar (slightly expanded but very close) investment into these thematic sectors, should they have conviction in their original investment choice.”
It seems you didn’t take up this suggestion.
A happy ending
QYour info on Rabobank last week, and access to some their accounts requiring a smartphone, does not coincide with my experience.
Last October I told them that I was not willing to buy a smartphone just to access my three accounts there. No other bank had that requirement. I have a very good online computer.
They told me that I could check my account balance on the phone. They never offered me any new token — which they said in your column last week was offered to current customers without smartphones.
I closed all three accounts (by email request), or so I thought. In June I found out they had not been closed. This time they did it. I emailed them later to request the tax return forms. None ever received.
They used to give great service. Pity the elderly are surplus to requirements.
AWith your permission, I gave Rabobank your name so they could look into what happened.
A Rabobank spokesman says the offer of a hard token “was communicated to customers who contacted us about this matter from late August 2024. Unfortunately, this was not proactively communicated to the reader, and the reader then requested their accounts were closed in October 2024.
“We concede our communication to customers who contacted us during the change over to the secure code was inconsistent, and we apologise to the reader and any other customers who did not have a smart device and were not made aware of the opportunity to apply for a token.”
The spokesman confirms the bank received your request to close your accounts last October, and says they “responded the same day with a request to send us a secure message confirming the account closures. No further communication was received from the reader until June 2025, at which stage the accounts were closed.
“We were unable to locate an email from the reader requesting tax forms.” However, the bank has now sent the forms to you.
It seems the bank’s communications haven’t been great. Perhaps you’ve slipped up a bit too, or for some other reason some messages from you didn’t get where they should have.
On your final comments, the spokesman says, “Every customer is important to us, and we are committed to carefully considering any feedback we receive about our products and services.”
PS: Right on deadline, I heard back from you: “Rabo got in touch. Unable to explain why I did not get their email reply last October, when I asked for account closure.
“They have now sent tax certificate advising that the passcode to open is my birthday, which by chance is today! So all is good and many thanks.”
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Mary Holm, ONZM, is a freelance journalist, a seminar presenter and a bestselling author on personal finance. She is a director of Financial Services Complaints Ltd (FSCL) and a former director of the Financial Markets Authority. Her opinions are personal, and do not reflect the position of any organisation in which she holds office. Mary’s advice is of a general nature, and she is not responsible for any loss that any reader may suffer from following it. Send questions to [email protected] or click here. Letters should not exceed 200 words. We won’t publish your name. Please provide a (preferably daytime) phone number. Unfortunately, Mary cannot answer all questions, correspond directly with readers, or give financial advice.