Nats to introduce auto enrolment for KiwiSaver

Finance Minister Bill English has announced that National will introduce automatic enrolment for KiwiSaver in 2014/15,  subject to returning to surplus.

“In the current environment, we need to be mindful of the fiscal costs of all programmes. So we will proceed with KiwiSaver auto-enrolment in the same fiscal year in which we return to surplus and start to repay debt,” he says.

“As signalled in the Budget, we believe there is merit in a one-off KiwiSaver auto-enrolment exercise, where people in the workforce not already in the scheme would be signed up with the ability to opt out.”

If National returns to government it will finalise details after considering submissions to a public discussion paper to be issued early next year.

This policy is part of the government’s plan to build genuine national savings. It complements other measures including a return to budget surplus by 2014/51; last year’s tax reductions on work and savings and the plan to provide investment opportunities through the mixed ownership model for state assets.

“These measures are pushing in the same direction households are already moving,” Mr English says.

“Having spent more than $1.10 for every dollar they earned three years ago, households will this year have a positive savings rate for the first time in more than a decade.”

The Government decided against introducing auto-enrolment before 2014/15 because its immediate focus remains on returning to budget surplus.  

“While we’re running deficits in the next two years, that’s money the Government would have to borrow. Borrowing more money to put into KiwiSaver accounts is not real savings – we are applying the same approach to resuming contributions to the Super Fund,” Mr English says.

Reduction of debt is real saving. Borrowing to invest isn’t just not real savings, it’s stupid.

“Depending on the uptake and design, officials estimate a KiwiSaver auto-enrolment could cost the Government up to $550 million over four years – including the one-off $1,000 kick start payments to new members and ongoing annual member tax credits. We intend to fund this from within existing budget allowances.”

This measure will catch people who haven’t got round to enrolling but stops short of compulsion.

The Government agrees with the Savings Working Group that a compulsory savings regime is not warranted, Mr English says.

“Many New Zealanders have already opted out of KiwiSaver because they have valid reasons for not saving for retirement right now – including paying off their mortgage or being members of private savings schemes.”

KiwiSaver is a very generous scheme. If you’re not enrolled now you either don’t need it, don’t understand it, haven’t got round to it or can’t afford it.

Auto-enrolment will catch all of these groups. Those who have better use for their money or cant’ afford it will opt out, but most of those who can’t understand the scheme or haven’t got around to joining will stay in which will help build national savings and ensure more people are providing for their own retirement.

13 Responses to Nats to introduce auto enrolment for KiwiSaver

  1. Peter says:

    Having just taken on a new worker, “we” feel ripped off by the whole Kiwisaver thing given we have to make contributions to “his” superannuation above his salary.

    “Borrowing to invest isn’t just not real savings, it’s stupid.”

    Well, one cannot disagree with that largely, so why does National borrow up to $300 million every week? I bet it is not all on “invested” on”infrastructure”. I think that Nationals levels of borrowing are unsustainable, heavens above, how can it all be paid back. It is frightening. $300 million a week is $300 a week for a family of four. No one has explained how this will be done without catastrophic harm inflicted on our economy.


  2. robertguyton says:

    National = Compulsion

    Meh! What’s new?


  3. homepaddock says:

    Which part of allowing people to opt-out makes it compulsory, Robert?


  4. Andrei says:

    When I first start work I bought into a super scheme = yes indeed 10% of my wages every week. The man who sold it told me how much it would be worth when I retired. A mouth watering sum – well back then it was.

    But it wouldn’t buy a house today, a nice car maybe.

    The trouble is “savings” need to be invested wisely by the institutions and when the institution is Government owned well the temptation of Government is to invest it in tosh – like movies that nobody in their right mind would pay to see. Or gender studies departments in order to inculcate marxist ideas of masculinity squashing into ECE student teachers to raise a generation of docile boys, not to mention climate science working out ways to justify theft novel taxes from the productive, a most egregious power and money grab and other items of merit to nobody but the beneficiaries of them.

    And Governments of course can discretely solve the problem of paying back the investors by printing money – usually all cleverly disguised of course in economic double talk whereby the money invested years ago is now worth little. What was significant when set aside has been well transformed into small change through the magic of Government voodoo.

    National, National another predatory socialist party full timeservers and BS.


  5. Peter says:

    Joy of joys, are you saying that as employers we can opt out? of our workers scheme? Sadly I think not. In other words = compulsion.!


  6. homepaddock says:

    Andrei – no KiwiSaver schemes are government owned.

    Peter – the contributions should be included in wage/salary packages so there’s no extra cost to employers.


  7. robertguyton says:

    Auto-enrolment, Ele.
    That part.
    Automatic enrolment.


  8. homepaddock says:

    Robert, if it was a compulsory scheme you’d have to stay enrolled which you won’t.


  9. jabba says:

    HP .. you are wasting your time on bOb


  10. Sally says:

    In my book this is a schizophrenia policy as most policies of today’s political parties are. Let’s have a bob each way just to win the baubles of power!


  11. New immigrants do struggle with complex concepts, ‘jabba’, so I’ll simplify it for you.
    You can’t choose to enrol in Bill’s version of Kiwisaver – enrolment is automatic. If you are automatically enrolled in something, and therefore can’t choose to enrol, it’s compulsory. I know, in Turkey, things are different, but here in New Zealand ‘compulsory’ means you have no choice. Enrolement in Bill’s Kiwisaver is compulsory. You’ll be thinking,
    “:ץראה תאו םימשה תא םיהלא ארב תישארב ”
    and while I sympathise, there’s nothing you can do about it. It’s how we do things in our country, jabba.


  12. Cadwallader says:

    My understanding from a number of Australians is that the fees the so-called superannuation providers charge are extortionate. That scheme is unavoidable and a lolly-scramble for the providers.

    Personally whether one wishes to save for retirement is a personal choice and the government can butt out.


  13. jabba says:



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