State Sector Retirement Savings Scheme

The Government’s announcement that it is to establish a new retirement savings scheme for the state sector is an encouraging initiative and bound to be a success says Global Retirement Trust General Manager Louise Gibson.

“If the success of the Teachers Retirement Savings Scheme launched by Government last year is anything to go by, the Government’s suggestion of a 30% uptake in the new state sector retirement savings scheme is more than likely,” says Gibson.

The Teachers’ Scheme is managed by the Global Retirement Trust (GRT) and was launched in September 2002 to teachers and principals in state and state-integrated primary, intermediate and special schools. “The response and uptake to the launch exceeded expectations with around 30 percent of eligible teachers joining in the first month. Membership now exceeds 7,400 and the number is still growing, “ says Gibson.

“The initial uptake and continued membership growth can be directly attributed to the main attraction of the Teachers’ Scheme – the employer contribution subsidy of 1% (net) by the Ministry of Education. This shows that even a small employer contribution will encourage savings. In fact, over half the teachers and principals in the Teachers’ Scheme are actually contributing more than the 1% minimum, which clearly shows that the message about the need to save for one’s retirement is hitting home!”

“The membership growth of the Teachers’ Scheme also serves to highlight the GRT’s experience in the state sector over the last 11 years that, when an employer encourages its employees to save for retirement by offering an employer contribution subsidy through membership of a superannuation scheme, the response is always very positive.”

Ms Gibson says that in fact there are a number of other schemes the GRT manages for state sector employers, which have also been very successful in encouraging individuals to save for their retirement. Indeed the majority of the schemes and arrangements initiated by individual departments, as mentioned in the State Services Minister Trevor Mallard’s press release, are managed by the GRT.

“The GRT specialises in addressing the retirement savings needs within the state sector. The GRT has a long-standing – 11 year relationship with the state sector, having been originally established to provide a retirement savings facility and investment vehicle for the state sector in 1992, when the Government Superannuation Fund (GSF) closed to new members. Having started out in 1992 with no members and a zero base, the GRT’s collective membership (approximately 97% state sector) now stands at around 22,000 individuals, with pooled retirement savings of over $400 million.”

Gibson said the GRT welcomes this first major initiative across the whole of government in 11 years to reintroduce and encourage retirement savings amongst state sector employees.

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