Government starts teacher super scheme
The government has quietly rolled out its first workplace-based superannuation scheme for its own employees – without opening up the scheme to competition.
Friday, October 18th 2002, 12:00AM
by Rob Hosking
The government has quietly rolled out its first workplace-based superannuation scheme for its own employees – without opening up the scheme to competition.
Primary teachers this month have the ability to invest in the Teachers Retirement Savings Scheme, which is being run by the Global Retirement Trust (GRT). The teachers will be part of GRT’s Employee Retirement Plan - a multi-employer, defined contribution superannuation scheme.
Secondary schools were offered a similar scheme during their much-publicised pay round this year but rejected the idea.
The primary teacher scheme was not opened to other industry participants – something that has raised a few eyebrows within the financial services industry. “There are a range of people with a range of risk profiles to be catered for amongst the primary teachers,” AMP’s head of superannuation strategy Linda McCulloch told Good Returns.
“It’s not a one size fits all thing for the teachers. I don’t have a problem with GRT but I think the industry would have been keen participants in something like this.” It is understood the main imperative of the scheme was have it started by October – hence the absence of any competitive tender for the work. However the industry is watching the next public sector move in this area closely.
The primary teachers’ scheme is a modest one – the ministry will pay the fees for the scheme until July 2003, and – if teachers join by the end of this week – pay an extra 1% of salary, backdated to July.
The move is the first in a promised push by Minister of Finance Michael Cullen to encourage workplace superannuation by setting an example in the government sector.
Encouraging public sector employees to save for their retirement however adds some urgency to one of the government’s other long-promised reforms in this area – removing the tax disincentive for those earning less than $38,000 a year to save.
Rob Hosking is a Wellington-based freelance writer specialising in political, economic and IT related issues.
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