What to do when your retirement fund is killing people
Sitting on the floor of my son’s bedroom as he lay in bed trying to drift off to sleep, with a nursery rhyme playing from my phone (Lavenders Blue), I was thinking about an email that my Kiwisaver provider had sent me – it’s our national retirement scheme, for anyone overseas – and I was thinking of the children of Gaza, with no nursery rhymes, no beds, and no parents sitting on the floor next to them. These two things are connected.
“What are you doing Mummy?” my 4-year-old son asked me.
Oh, the many ways I could’ve answered that question. I could’ve said I was thinking about children on the other side of the world dying from hate-filled, indiscriminate bombing. Or I could’ve said I was thinking about how damn hard it is to cut through the bureaucracy, and shadowy, secret information, that companies and institutions hold but consumers don’t. “I’m just thinking,” I said.
One of my favourite writers,
, posted on her Instagram feed about changing Kiwisaver providers, after finding out the fund she was in was supporting bombing in Gaza. She inspired me to look into my own Kiwisaver fund.It feels like there is not much we can do about this conflict; we can’t even be assured of aid getting to the people. All we can do is urge our governments to condemn the senseless killing or post on social media for a ceasefire. I’ve been reading about personal finance and investments lately – so Emily’s post made a little lightbulb ping in my overladen, sluggish mind. I can do this, I thought. I can contact my Kiwisaver provider and make sure they’re not investing in Israel, or weapons. (I want to say before continuing, that I don’t condone either Hamas or Israel. I asked my Kiwisaver provider about Israel, because it is very unlikely they are going to be supporting Hamas, a terrorist organisation).
So began my journey to the difficulty in finding out where the money you earn from your salary, which goes into a fund of your choosing, along with thousands of other people’s money, before being invested into conservative / moderate / growth securities (mine is in growth) – actually goes.
My first email to my provider, ASB, was simple.
If our Kiwisaver providers are investing in Israeli Government bonds, then we are inadvertently funding weapons and mass killing. I know that some funds now have a blanket policy not to invest in munitions companies. But, I wanted to double-check.
The reply I received back unfortunately told me nothing and talked about the different funds on offer. Hmm, not what I asked.
So finally, seven days after my original email, I received a response. I was grateful to get back something honest.
Yes, ASB do invest in some Israeli holdings, in a small proportion of their overall fund (less than half a percent): in one US-listed company in Israel; and … in Israeli Government bonds. They gave me an example: If I had $30,000 invested in the growth fund, the value of the Israeli holdings is around $3. A conservative fund is worse, because by its nature more money is put into government bonds in such a fund as they carry less risk.
$3 doesn’t seem like much, does it? But what if you took the entire value of that fund, and extrapolated it? According to ASB’s latest annual report from August 2023, there were
495, 305 members in their scheme. When you take their contributions, the government’s contributions and their employer’s contributions, it totals a whopping $14, 474, 415, 566. That’s $14.4 billion worth of funds.
This report doesn’t tell me how much money is in each fund (conservative, or growth etc). But if we take a mid-range percentage of Israeli bond investment between a conservative fund (0.06%) and a growth fund (0.01%) and say that ASB is investing around 0.035% in Israeli bonds, guess how much money that is?
$5,066,045. Not an insignificant sum.
But where does that leave us? At the bottom of their email, ASB say that they don’t invest in securities that are subject to government sanctions. And they have their own criteria, or framework, for excluded investments. Currently, Israeli government bonds and companies are not excluded.
My next step will be to email them to ask them to consider pulling out of these bonds, and the US-listed company as well, as that bumps up ASB’s investment to well over $5 million.
[Side-note: Investments in Israeli bonds have gone up by at least $300 million from American investments alone, since the start of this war].
This isn’t JUST about one individual person, me, and how much I inadvertently invest in Israel (and by that token, other governments and companies I don’t want to invest in, but am, unknowingly). It’s about how companies, governments and retirement schemes can fund war crimes, killing sprees, genocides, and the breaking of international humanitarian law … but also how the refusal to acknowledge this can be infuriating for the customer (me) and devastating for the people being affected by this, the people in Gaza.
I wanted to find out a little piece of information and it opened up a whole lot more questions, but it was just one thing I could do. Now I get to decide – will I keep my money there or move it to another fund? That really depends on how they answer my next question.
Will ASB consider carefully where they invest and see if they can stop those Israeli government investments?
This opens up wider questions of socially responsible investing and whether the funds we invest in are using our money in the ways we intend it to be. This isn’t just about returns. It isn’t about a measly $3. And it’s not about Israel vs Palestine either – all killing, acts of terrorism and breaking of international humanitarian laws should be condemned, full stop. It’s about the ability we have to do something about where our investments go and what they’re used for; in other words, ethical investing.
While I was sitting on the bedroom floor, mulling over all of this, the nursery rhyme switched to a line about ‘keeping warm’. My son came out with something that drew my attention back to the moment: “Sometimes there are kids without jackets, without shoes, hats, food… and we have to help them, and give them those things.”
If a four and a half year old can understand that, and demonstrate such empathy – why can’t our Kiwisaver providers? And why can’t the people dropping those bombs?
Want to do something?
There is a note on ASB’s web page on Responsible investing. On this page they note that there are exclusions to what they invest in, and this includes all weapons.
I think investing in Israeli bonds would fall under each of these potential criteria for exclusion:
If its activities are opposed to our own purpose and values
If our peers in New Zealand have excluded an investment or its industry
If the majority of our customers that we survey have a strong desire not to invest in it or its industry
One off exclusions: Securities excluded for exceptional reasons such as strong customer consensus objecting to the nature of the company activities or where the company activities do not align with ASB's values or policies.
If you have ASB Kiwisaver, you can write an email to them (retire at asb dot co dot nz) and ask them to stop investing in Israeli bonds and companies. If you’re with another provider, ask them: do they invest in weapons? Do they invest in Israeli bonds, and therefore, the senseless killing that is happening in Gaza right now?
It may seem like a small thing. But it’s a lot of money, and it’s our money, and we (and the people of Gaza) deserve to have some control over where it’s going.
I love this so so much. Thank you for your beautiful and articulate words! It’s not about the $3!