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Kristin Sutherland, financial coach at enable.me and co-founder of Smart Retirement.\u00a0<\/p>\nWhen one third of the New Zealand workforce is aged 55 or older \u2013 are employers doing enough to help them prepare for retirement?\u00a0<\/p>\n
Some of the responsibility is being shifted away from the government and onto the individual and the employer. With a projected 21\u201326% of New Zealanders expected to be over 65 by 2048, the government is likely to struggle to fund its current superannuation obligations.<\/p>\n
That shift was signalled in this year\u2019s Budget, with employer KiwiSaver contributions rising to 4%, while government contributions were axed for high earners and halved for everyone else.<\/p>\n
Retirement increasingly rests in our own hands, but employers have an important role to play, too. Kiwi organisations can make a powerful positive difference to their workers\u2019 retirement outcomes, says Kristin Sutherland, a financial coach at enable.me and co-founder of Smart Retirement.\u00a0<\/p>\n
\u201cPolicies are putting more of the onus on employers, and I do think they have a responsibility to provide some information on retirement planning,\u201d says Sutherland. \u201cStarting the conversation can really make a difference, and any support is a great value-add for their staff.\u201d \u00a0<\/p>\n
Making the most of KiwiSaver: contributions, funds and employee benefits\u00a0<\/p>\n
Employer contributions have a huge impact on KiwiSaver balances at retirement. Considering changes like moving to the 4% contribution rate early, or bumping it up to 5%, can have a huge positive effect on your employees.<\/p>\n
In June, enable.me surveyed businesses to see how they are supporting their employees beyond a pay rise. Just 4% of the companies surveyed were contributing more than the legal minimum to KiwiSaver. If your organisation does contribute more than the minimum, Sutherland urges making sure your team knows about it and understands the long-term value.\u00a0<\/p>\n
\u201cI think extra contributions do make staff think twice about leaving. They feel appreciated, and they think, \u2018Maybe I\u2019m not going to get these benefits elsewhere\u2019,\u201d says Sutherland. \u201cFor employers, if you\u2019re going to pay over the odds, make a sales pitch of it. Educate your team and show them how much it adds up over time.\u201d<\/p>\n
Kristin Sutherland, financial coach at enable.me and co-founder of Smart Retirement.\u00a0<\/p>\n
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While employer KiwiSaver contributions aren\u2019t mandatory for employees over 65, many businesses continue them. This is another excellent opportunity that companies often fail to promote, says Sutherland. Again, by demonstrating the long-term benefits with projections, your business can illustrate the long-term value to the team.<\/p>\n
Organisations can also support employees by helping them choose an appropriate KiwiSaver fund. This might mean directing people to the Sorted KiwiSaver fund finder, or hosting a \u2018lunch and learn\u2019 with a financial adviser who covers the basics.<\/p>\n
\u201cMy experience is that people are usually not in the right KiwiSaver fund. They\u2019re normally in a more conservative fund than they need to be. If you can\u2019t sleep at night with a higher risk option, that\u2019s fine. Otherwise, if you\u2019re more than 10 years from retirement and not using the money for a first home, you probably want to be as aggressive as you\u2019re comfortable with,\u201d Sutherland says. \u201cIt needs to perform well, and the right fund will make a big difference to your retirement savings.\u201d<\/p>\n
There are strategies your organisation can take to improve how you support staff in optimising their KiwiSaver.<\/p>\n
You could put together an information pack, extra resources, or even offer a session with a financial adviser for employees turning 55, to make the most of their runway to retirement.<\/p>\n
\u201cWe can do a lot in 10 years. After that the runway gets shorter and shorter. It\u2019s much harder if you\u2019ve left it until you\u2019re 65,\u201d Sutherland says.\u00a0<\/p>\n
Supporting choice in the work-to-retirement transition\u00a0<\/p>\n
It\u2019s been a tough winter for Kiwi businesses, with a third of survey respondents indicating that extra staff benefits aren\u2019t currently affordable. Sutherland emphasises that simply supporting workers to think about the future and start planning is surprisingly valuable. FSC research finds that 44% of New Zealanders feel prepared for retirement, down from 50% in 2024. Talking about retirement planning, testing scenarios and creating roadmaps all help people improve their preparedness.<\/p>\n
\u201cIt\u2019s about getting the person to plan: \u2018What does your retirement look like? Is it part-time work, or consulting, or volunteering? What will you do with your time?\u2019 The financial side of retirement is important, but it\u2019s not everything. People also need to prepare psychologically for the end of work.\u201d\u00a0<\/p>\n
It\u2019s a topic close to Sutherland\u2019s heart \u2013 after 40 years of work, her father collapsed on the first day of his retirement. The A&E nurse told the family that he was the fifth person she had seen that week who had just retired.<\/p>\n
That moment sparked Sutherland\u2019s passion for helping people psychologically plan for a smooth transition out of work. That pathway is highly individual, but employers can provide support by talking to senior team members about what shape their future work life might take. Around a quarter<\/a> of Kiwis work beyond age 65, one of the highest rates in the world.\u00a0<\/p>\n \u201cEmployers should be looking after workers at the end of their career, not just the beginning,\u201d Sutherland says. \u201cThat support can establish a positive relationship, so if the employer still needs access to that person\u2019s knowledge, the retiree might come back as a part-timer, a mentor, or a consultant. That\u2019s much more positive than just saying, \u2018See you later\u2019.\u201d<\/p>\n