The study surveyed 14 key financial service providers in the New Zealand superannuation and risk market, which, with AMP, represent more than 90% of the industry. AMP commissioned the qualitative study to evaluate the changing needs of customers, and contribute to the stubborn superannuation issue.
AMP Manager Corporate Markets Linda McCulloch says, "the study found that NZ employers - see no incentive or advantage to offer a superannuation facility or subsidy to their employees."
"Those surveyed agreed there was no compelling reason for employers to sponsor superannuation, or provide a contribution themselves. Saying: "…employers have a poor understanding of the different kinds of group super available; they see no up-front tax benefit; and when business confidence suffers they favour salary-only over benefit-based packages," says Linda McCulloch.
"The findings challenge industry, employers, Government and individuals. The solution is to bring these main stakeholders together to find some common ground and move forward if individuals are to be encouraged to think ahead and save for the long-term."
Taxation was also highlighted as a barrier to employers supporting employee super savings, she said, with respondents commenting: "…We’ve had a taxation structure that provides no incentive for employers to set up a super scheme. They’re busy dealing with their own business and they don’t need another hassle." And, "…if government addressed some of the taxation issues then it wouldn’t take much for that whole industry to have a new burst of life…"
"Employers want a hassle free one stop shop approach to super," says Ms McCulloch.
"One way of doing this is through Master Trusts. A master trust is basically where many employers join one superannuation trust. The shared costs, reduced risk and easy access have made these a popular choice for small and medium-sized employers. Even trustees of large super schemes are now looking at this option as a positive alternative."
"We already know that just three percent of New Zealand employers contribute to super for their staff. Tax advantages would give them more incentive to offer it, and it is encouraging to see the Finance Minister, as reported in the Dominion last week, acknowledge he was evaluating incentives and looking to the business community to encourage long term savings," says Ms McCulloch.
CLICK HERE FOR A COPY OF THE RESEARCH
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