Compulsory Super regret for most Kiwis

RICHARD MEADOWS
Last updated 11:56 14/01/2013

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Almost three in four New Zealanders today regret the axing of the compulsory superannuation scheme in 1976, according to a survey commissioned by the Financial Services Council.

The Horizon Research survey of 2,107 people found the majority of respondents also believed that KiwiSaver should be made compulsory for all employees.

Fifty-nine per cent of those surveyed supported universal KiwiSaver, while 16 per cent were either opposed or strongly opposed. A further 25 per cent were either neutral or not sure.

National previously announced intentions to auto-enrol all workers not already in KiwiSaver in 2011, with provisions to opt out for those who did not wish to join. That plan has been put on ice until the Government returns to surplus and can afford the $514 million price tag of the project.

The Financial Services Council has a vested interest in promoting KiwiSaver and retirement saving, with its member companies collectively managing nearly $80 billion worth of funds.

However, chief executive Peter Neilson said it did not have a position on whether KiwiSaver should be universal for employees.

Workplace Savings, which represents a broader group of employers, advisers and superannuation providers, supports the Government's current proposal.

Executive director Bruce Kerr said the group did not take a stance on whether it should be extended to compelling workers to contribute.

"I think it's reasonable to say it has its merits, but it also has some detractions."

He said the current proposal would give those people who could not afford to divert money out of their pay packet an opportunity to at least consider the proposition.

"A lot of New Zealanders probably save in other forms, and some don't need to be compulsorily put into KiwiSaver."

Many people who were not currently in the workplace had chosen voluntarily to move into KiwiSaver, or signed up their children to take advantage of tax credits, he said.

"It's getting acceptance across a broad range of New Zealand. We see that as a very good thing."

The country's original compulsory superannuation scheme was engineered by the Labour Party in 1975, with combined contribution rates for employees and employers set at 8 per cent of earnings.

But the scheme was destined to be short-lived, abolished in less than a year by Rob Muldoon's incoming National Government.

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- BusinessDay

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