New managing director of ING (NZ) Limited, Marc Lieberman, says the workplace is the ideal place for most New Zealanders to get into the savings ethic in a relatively painless way.
“Numerous overseas models support this approach. However, it has to be recognised this is only a first step on the path to what we regard as the need for eventual compulsion.
“The same flexibility designed to get as many people involved in KiwiSaver as possible – namely the ‘opt in’ feature – could also be the scheme’s downfall if savers are later tempted back into the consumption mindset and choose to stop contributing.”
He also pointed out that while the scheme had the added merit of allowing savings to be used towards a first home, KiwiSaver has to be seen primarily as a long-term retirement scheme and not a fast-track home-buying plan.
Lieberman noted that although the Government had reinforced its commitment to KiwiSaver through yesterday announcements, there were still many questions around the detail, including the process for electing providers and establishing default schemes.
“With 01 April 2007 only just over a year away, there is still much to be resolved by officials, the Ministry of Economic Development, product providers and employers.
“Given all of this, together with the planned review of the tax treatment of managed funds, there’s still a lot of work to be done. Nevertheless, these are necessary and positive steps if we want to improve our savings record and more importantly the living standards for those in retirement.”
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