KiwiSaver take up rates expected to be higher than forecast
The government’s assumption on uptake of KiwiSaver looks to be on the modest side.
Tuesday, January 16th 2007, 7:08AM
by Rob Hosking
The government’s figures were based on the original KiwiSaver proposal, but just before the bill was it threw in two significant add-ons: mortgage diversion and a tax break for employer contributions.
The tax break is expected to increase the number of employers prepared to make contributions – and that alone is likely to boost the numbers of employees joining KiwiSaver.
“I’m now thinking we might get quite a surge in take up in first one or two years,” AMP Financial Services Roger Perry says.
ASB Bank’s chief executive Hugh Burrett is another who thinks there could be a surprising pick up initially. “You would think, with that employer contribution, that would be an incentive.”
He points to the State Sector Retirement Savings Scheme, where just over half those eligible have opted in. Research has shown the most powerful drawcard has been the employer contribution, which has been effectively a pay rise.
ING’s head of marketing, Stephen Giannoulis, is another who is expecting a higher take-up.
“We initially took the government’s estimates, but of late we have upped those. We think the tax incentives will increase the numbers of people who won’t opt out. We don’t think there will be a mad rush but it is a lot more promising than it was.”
Rob Hosking is a Wellington-based freelance writer specialising in political, economic and IT related issues.
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