tmmonline.nz  |   landlords.co.nz        About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds

NZ's Financial Adviser News Centre

GR Logo
Last Article Uploaded: Saturday, March 2nd, 10:32AM

Investments

rss
Latest Headlines

Another leading KiwiSaver provider calls for changes

Calls for changes to KiwiSaver are growing louder.

Sunday, September 24th 2023, 6:00AM 1 Comment

Milford is the latest KiwiSaver provider to call for changes to the $100 billion scheme, saying the current setup won’t support members’ retirement aspirations.

Murray Harris, head of KiwiSaver and Distribution at Milford, says although many members are contributing the minimum 3% of their salaries, that is not enough, given the importance of the scheme to Kiwi's financial futures.

Recently, Simplicity founder Sam Stubbs told Good Returns TV it's time to make changes to the scheme. (You can watch the video here).

Added to these calls the Financial Services Council outlined areas it wants to see changes in.

Chief executive Richard Klipin recently said: “The FSC is calling for a full review of KiwiSaver".

Harris says the scheme has been very successful in gathering membership, but several changes need to be made for KiwiSaver to better support New Zealanders in retirement, including:

  • A gradual annual increase of 0.5% to contribution rates, reaching a total contribution of at least 10%
  • Tax relief or concessions on contributions rather than PAYE rates to incentivise members to contribute
  • Potential decoupling of employee and employer contributions for lower income workers so they could receive employer contributions, even if not contributing themselves, with potential tax relief for the employer

Harris points to Australia as a good example for New Zealand to follow. Its compulsory savings rate is 11%, increasing to 12% by 2025. Contributions are generally taxed at a flat rate of 15%.

“People have this mindset that if they are in KiwiSaver, they’re okay,” Harris says. “But really they’re probably only saving about half as much as they need to be.

"As an industry, we’re looking at how we can help people understand how much they need to save for a comfortable retirement and then help them achieve that. Advice and education is really important, as well as an upgrade of the KiwiSaver scheme.”

The FSC says “we know there are substantive and strategic issues around contribution levels, the age of retirement, the 25% gender retirement gap, and the fact that 53% of us aren’t able to access $5,000 in time of emergency.

“These require serious attention if we are to make KiwiSaver a best in class system globally."

Tags: Milford Asset Management

« KiwiSaver fee revenue drops for the first time since 2007KiwiWrap KiwiSaver has highest average balance »

Special Offers

Comments from our readers

On 25 September 2023 at 1:51 pm Murray Weatherston said:
Seems to me this is pretty much a vested interest call.
Wouldn't every industry like to get Government to regulate to force more people to buy more of their products?
Years ago NZ chose to adopt the TTE system for taxing superannuation. There should be significant research before changing that - not simply a producer lobby to change one of the Ts to a little t in order to make the product more attractive.
I wonder what the results of a popularity contest for a tax change affecting consumers - make mortgage interest deductible vs making medical insurance premiums deductible vs cutting tax on super to 10% vs making private school fees tax deductible?

Sign In to add your comment

 

print

Printable version  

print

Email to a friend
News Bites
Latest Comments
Subscribe Now

News and information about KiwiSaver

Previous News
Most Commented On
Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA - Back My Build 6.19 - - -
AIA - Go Home Loans 8.74 7.45 7.05 6.85
ANZ 8.64 7.99 7.49 7.35
ANZ Blueprint to Build 7.39 - - -
ANZ Good Energy - - - 1.00
ANZ Special - 7.39 6.89 6.75
ASB Bank 8.64 7.39 6.89 6.65
ASB Better Homes Top Up - - - 1.00
Avanti Finance 9.15 - - -
Basecorp Finance 9.60 - - -
Bluestone 9.24 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Classic - 7.29 6.85 6.65
BNZ - Green Home Loan top-ups - - - 1.00
BNZ - Mortgage One 8.69 - - -
BNZ - Rapid Repay 8.69 - - -
BNZ - Std, FlyBuys 8.69 ▼7.89 ▼7.45 ▼7.25
BNZ - TotalMoney 8.69 - - -
CFML Loans 9.45 - - -
China Construction Bank - 7.09 6.75 6.49
China Construction Bank Special - - - -
Co-operative Bank - First Home Special - ▼7.09 - -
Co-operative Bank - Owner Occ 8.40 ▼7.29 6.89 6.75
Lender Flt 1yr 2yr 3yr
Co-operative Bank - Standard 8.40 ▼7.79 7.39 7.25
Credit Union Auckland 7.70 - - -
First Credit Union Special - 7.45 7.35 -
First Credit Union Standard 8.50 7.99 7.85 -
Heartland Bank - Online 7.99 6.69 6.45 6.19
Heartland Bank - Reverse Mortgage - - - -
Heretaunga Building Society 8.90 7.60 7.40 -
HSBC Premier 8.59 - - -
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 7.85 7.05 6.85 6.59
Lender Flt 1yr 2yr 3yr
Kainga Ora 8.64 7.79 7.59 7.29
Kainga Ora - First Home Buyer Special - - - -
Kiwibank 8.50 8.35 7.89 7.65
Kiwibank - Offset 8.50 - - -
Kiwibank Special - 7.35 6.89 6.75
Liberty 8.59 8.69 8.79 8.94
Nelson Building Society 9.00 7.90 7.39 -
Pepper Money Advantage 10.49 - - -
Pepper Money Easy 8.69 - - -
Pepper Money Essential 8.29 - - -
Resimac - LVR < 80% 8.84 8.30 7.89 7.69
Lender Flt 1yr 2yr 3yr
Resimac - LVR < 90% 9.84 9.30 8.89 8.69
Resimac - Specialist Clear (Alt Doc) - - 8.99 -
Resimac - Specialist Clear (Full Doc) - - 9.49 -
SBS Bank 8.74 7.95 7.45 7.29
SBS Bank Special - 7.45 6.95 6.79
SBS Construction lending for FHB - - - -
SBS FirstHome Combo 6.19 7.05 - -
SBS FirstHome Combo - - - -
SBS Unwind reverse equity 9.95 - - -
Select Home Loans 9.24 - - -
TSB Bank 9.44 8.19 7.55 7.55
Lender Flt 1yr 2yr 3yr
TSB Special 8.64 7.39 6.75 6.75
Unity 8.64 6.99 6.85 -
Unity First Home Buyer special - - 6.45 -
Wairarapa Building Society 8.60 7.15 6.85 -
Westpac 8.64 7.89 7.49 7.25
Westpac Choices Everyday 8.74 - - -
Westpac Offset 8.64 - - -
Westpac Special - 7.29 6.89 6.65
Median 8.64 7.45 7.37 6.77

Last updated: 1 March 2024 10:00am

About Us  |  Advertise  |  Contact Us  |  Terms & Conditions  |  Privacy Policy  |  RSS Feeds  |  Letters  |  Archive  |  Toolbox  |  Disclaimer
 
Site by Web Developer and eyelovedesign.com