For the benefit of those who missed the controversy over KiwiSaver and cluster bombs, here's a quick recap:

Last August, the media reported that hundreds of thousands of KiwiSavers were inadvertently invested in cluster bomb and land mine manufacturers via their retirement schemes.

That was in contravention of Government obligations under international conventions banning use of such weapons and investment in the companies that make them. The New Zealand Superannuation Fund and ACC, considered world leaders in ethical investing, don't invest in such companies.  We don't either but more on that later.

The New Zealand Herald reported on the scandal here.

Today, seven months, after the story broke, the Financial Markets Authority, admonished four default providers for not taking action. More here from Radio NZ. 

In October 2016, only a few months after launch, we announced that Simplicity would begin using a fund managed by Vanguard that excluded tobacco, land mines and nuclear weapon manufacturers. The implementation took place in early December.  Action was swift thanks to Vanguard who accommodated our request for a fund in line with what our members wanted. 

To hear that several default providers, (these are KiwiSaver providers that investors are allocated to automatically if they don't make an active choice) were still invested in these nasties --- almost seven months later was disconcerting to say the least.

Simplicity's managing director Sam Stubbs today called for the suspension of the providers pending a change in their business practise.

While a few providers have made good, it's not good enough that a few continue to drag the chain.

The situation is compounded by the fact that many KiwiSaver members who were enrolled in default schemes don't even know who their provider is. So they remain in the dark.

Default providers status is a privilege. And providers fortunate enough to have that should be held to a high standard. 

Suspension seems only fitting until they get their act together. New Zealanders deserve it.