“The ISI is pleased that the Savings Product Working Group findings support our belief that savings by deduction from salary is the most efficient and effective option”, said Arkinstall.
“A key part of the Group’s work revolves around the lessons from psychology and why people save or don’t save. This is an area that requires further consideration. Experience shows that economic rationality and logic has not been successful in raising NZ’s personal saving rates.”
ISI is also encouraged at the Group’s finding “the Group has concluded that current practice will not alter materially if the status quo prevails. Change will need to be orchestrated.”
“Not every one will support the outcomes but the Group’s recommendations have merit. It is essential that any implementation process recognises that minimising compliance on employers is essential. Also administration for products must be kept at an absolute minimum to provide cost efficient options to consumers, ie the employees”, said Arkinstall.
“The concepts of a ‘pathway’ and ‘the light on the hill’ are supported by ISI. Saving is a highly complex and emotional subject and the Working Group proposal is a further step towards increased personal responsibility for saving and preparation for advancing age.”
“The savings industry welcome this work and the practical options it proposes. We will be providing a positive contribution to the submission process that the Minister has announced.”
A press release from Investment Savings and Insurance Association
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