Some managers getting headstart on KiwiSaver
Concerns are being raised about how officials are going liaising with the industry as a preparation for the government’s workplace superannuation scheme, KiwiSaver.
Thursday, November 24th 2005, 6:21AM
by Rob Hosking
Tax officials are talking confidentially to some individual providers about the issues they will face in implementing KiwiSaver.
Although the Ministry of Economic Development is the lead agency on KiwiSaver contributions to the scheme will be made through the tax system, hence the IRD’s role.
The discussions between IRD officials and some selected individual providers are subject to some pretty tight secrecy agreements and the motive for the discussions allow officials to get an idea of the practical issues involved.
But fears have been expressed the discussions will give the providers involved will get an unfair advantage over others, says the Investment Savings and Insurance Association.
“I can understand they have to have these discussions,” says ISI chief executive Vance Arkinstall. “But the risk is some providers will be inadvertently advantaged.”
The Inland Revenue was asked for comment on the issue but did not respond before deadline.
The concern is not the only one being raised by the industry, says Arkinstall. The timeline outlined by the Ministry of Economic Development early this week – legislation introduced in late February; passed in late October; selection of providers to run parallel with that legislative process – is seen as being highly ambitious given the current lack of knowledge about key policy areas.
“There’s still a huge amount of policy detail yet to be seen and discussed. Issues like the interaction with group superannuation schemes is obviously important.
“There was also talk in the Budget about some government contribution to fees and charges – we’ve no idea what that will look like.
“At the moment the industry is very interested in participating in a discussion on all these issues but until we have more information its very hard to move forward in designing products and making KiwiSaver work.
“So we’ve a bit disappointed.” KiwiSaver is due to be introduced to the workplace in April 2007.
Rob Hosking is a Wellington-based freelance writer specialising in political, economic and IT related issues.
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