{"id":144131,"date":"2025-09-15T04:40:10","date_gmt":"2025-09-15T04:40:10","guid":{"rendered":"https:\/\/www.newsbeep.com\/au\/144131\/"},"modified":"2025-09-15T04:40:10","modified_gmt":"2025-09-15T04:40:10","slug":"retirement-and-kiwisaver-incentive-to-save-close-to-nil","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/au\/144131\/","title":{"rendered":"Retirement and KiwiSaver: Incentive to save ‘close to nil’"},"content":{"rendered":"

The easiest change to KiwiSaver<\/a> would be to stop employers from putting KiwiSaver contributions into a person\u2019s total remuneration package, the founder and managing director of a KiwiSaver scheme says.<\/p>\n

So instead of receiving your employer contribution as part of your salary, it would be on top of your salary.<\/p>\n

Speaking on a panel at the Financial Services Council Conference last week, founder and managing director of K\u014dura Wealth Rupert Carlyon said: \u201cThat is probably the biggest driver of inequity of all in KiwiSaver.\u201d<\/p>\n

Carlyon said 40% to 45% of employers have this in their contracts.<\/p>\n

This means for most people, now that the maximum government contribution<\/a> has gone down to about $260, \u201cthe incentive is close to nil\u201d, he said.<\/p>\n

\u2018Not how KiwiSaver is designed to operate\u2019<\/p>\n

In 2023, a Retirement Commission survey<\/a> which involved 306 organisations, found 45% use a total remuneration approach. Of those, 60% said it was simpler and 21% said it was cheaper.<\/p>\n

At the time, Retirement Commissioner Jane Wrightson\u200b said<\/a>: \u201cThis is not how KiwiSaver is designed to operate, as the legislation clearly states that compulsory contributions must be paid on top of gross salary or wages except to [the] extent that parties otherwise agree.\u201d<\/p>\n

But it was not legislatively prohibited, \u201cso long as the outcome is the result of good faith bargaining\u201d, Wrightson said.<\/p>\n

\u2018The panacea is the Australian system\u2019<\/p>\n

Carlyon said he thought everyone in the room would agree that the panacea is the Australian system<\/a>.<\/p>\n

\u201cIt\u2019s compulsion and increasing contribution rates to that 12% to 14% which is where we know it needs to be to be self-sustaining.\u201d<\/p>\n

\u201cWe can\u2019t have compulsion without an incentive,\u201d Carlyon said, and in New Zealand \u201cthere is almost no incentive for individuals to have their money locked up until they\u2019re 65\u201d.<\/p>\n

\u201cWhat the Australians have done to pay for it is a simple means testing on superannuation in Australia. That\u2019s how they\u2019ve got a model which is consistent at 4.5% of GDP and you can rely on the super payments plus the incentives, and that\u2019s the model that we need to go [to].\u201d<\/p>\n

While it was nice to hear about “the fist and glove” of superannuation and KiwiSaver<\/a>, Carlyon said, \u201cwe can\u2019t afford to provide incentives unless we move pretty quickly to make changes to superannuation”.<\/p>\n

Politics<\/p>\n

During a question and answer session at the Financial Services Council Conference last week, Labour\u2019s finance spokesperson Barbara Edmonds<\/a> brought up total remuneration packages.<\/p>\n

Labour had previously had a Bill in the House about this, Edmonds said.<\/p>\n

When asked if conversations were had with other political parties whether the remuneration package needs to be looked at, Edmonds said she thought it was part of the discussion that needs to be had.<\/p>\n

Edmonds said she was conscious that businesses did total remuneration packages because it was more affordable.<\/p>\n

\u201cIt\u2019s not just around age or contribution or how you pay for it. You have to look at the full consequences of it.\u201d<\/p>\n

At the same conference, Finance Minister Nicola Willis said National would be going into next year\u2019s election with a superannuation and savings policy<\/a> that it believes addresses some challenges New Zealanders face.<\/p>\n

\u201cKiwiSaver has to be part of that,\u201d Willis said.<\/p>\n

Meanwhile New Zealand First leader Winston Peters announced a proposal to increase both employee and employer contributions to initially 8% and then later to 10%.<\/p>\n

KiwiSaver would be compulsory, and KiwiSavers and employers would receive tax cuts to cover the increases, Peters said.<\/p>\n","protected":false},"excerpt":{"rendered":"The easiest change to KiwiSaver would be to stop employers from putting KiwiSaver contributions into a person\u2019s total…\n","protected":false},"author":2,"featured_media":144132,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[64,63,99,186,184,185],"class_list":{"0":"post-144131","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-au","9":"tag-australia","10":"tag-business","11":"tag-finance","12":"tag-personal-finance","13":"tag-personalfinance"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/144131","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=144131"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/144131\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/144132"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=144131"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=144131"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=144131"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}