More KiwiSaver incentives required: Poll

Changes to KiwiSaver announced in this year’s Budget have turbo-charged the semi-sompulsory savings scheme, however they don’t go far enough.
A poll of senior finance industry representatives conducted by Finsia, the Financial Services Institute of Australasia, reveals that majorty of respondent want more incentives in the scheme.


Finsia says that 57% believe “that more incentives are needed to be built into KiwiSaver to meet the aim of improving the New Zealand saving rate and provide capital for future investment.”


Meanwhile, while 23% believe KiwiSaver is sufficient and 20% believe KiwiSaver is ill-equipped to have any significant impact on national savings.


Other findings from the poll are more positive.

  • 53% believe it KiwiSaver changes will raise household savings
  • 49% believe it will create a more secure retirement for Kiwis
  • 44% believe it will address the future costs of an ageing population.

“A clear message from the poll was that further work is required on KiwiSaver,” Finsia chief executive Brian Salter says. “The majority (57%) believe that more incentives are needed to meet the aim of improving the New Zealand saving rate and provide capital for future investment.”

“Finsia supports the notion of a default contribution savings scheme in the New Zealand market to further boost retirement savings. Finsia also supports policies that create a strong and productive economy with a “deeper capital base”. This is crucial for ensuring longer-term financial security for New Zealanders.”

The on-line poll of 61 members of the Financial Services Institute of Australia (Finsia) was conducted between May 25 and 30 by Roy Morgan.

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NZX joins KiwiSaver race

NZX investment subsidiary Smartshares is launching a Kiwisaver scheme.

Called SmartKiwi, the company believes that KiwiSaver will deliver strong benefits to New Zealand’s capital markets, and the economy at large.


The SmartKiwi offering will have three investment options to choose from, a high growth option consisting of equities only, split between NZX and ASX stocks; a balanced option which will be split between equities and bonds; and a conservative option which invests primarily into fixed interest securities.

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Will KiwiSaver force employers to consider

“Employers who struggle to pay KiwiSaver contributions may face a double whammy paying out extra on redundancy payments if they try to downsize,” say Ernst & Young KiwiSaver spokespeople Jo Doolan and Aaron Quintal.Press release – Ernst & Young

“For employees who are members of KiwiSaver, any redundancy payments will be subject to KiwiSaver contributions both by the employee and, from 1 April 2008, the employer”

“For employers who are already thinking they may have to lay people off, but are still hoping to trade through their difficulties, this aspect of KiwiSaver may encourage them to rush through any redundancies prior to 1 April 2008 to avoid this additional cost”

“The outcome is equally unfair on employees. The purpose of a redundancy payment is to tie the worker over until they find a new job. Having 4% disappear out of their redundancy payment by way of a KiwiSaver employee contribution could be an unwelcome surprise at an already stressful time”

“This appears to be an issue that hasn’t been fully considered in the rush to get the revised KiwiSaver package in place. We would hope the Government and their officials could turn their attention to this problem sooner rather than later.

“As with anything new the complexities and wrinkles emerge over time but this is certainly not a case where employers should be sitting back and doing nothing.

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Staples Rodway launches Kiwisaver scheme

Press Release: Leading accounting firm Staples Rodway has launched a KiwiSaver scheme that will be available to both their clients and the wider public.The Staples Rodway scheme includes Conservative, Balanced and Growth investment funds that are each independently managed. Members can choose any combination of these funds and will be provided with an investment attitudes questionnaire to help them with their choice.

Alternatively a member can simply choose an age group option which will see their KiwiSaver contributions invested in a combination of funds considered appropriate for their age group.

James Scarr, director of Staples Rodway Superannuation, said it is important for every New Zealander participating in KiwiSaver to ensure their contributions are being invested in a mix of growth and income assets appropriate for their age and risk profile.

“Due to their rigid investment policies the default KiwiSaver schemes may not be the best choice for every New Zealander. Staples Rodway is providing a range of funds that will offer Kiwis one or more funds to match to their risk profiles,” said Scarr.

A key feature of the Staples Rodway KiwiSaver scheme is that each fund will have an independent investment manager, based on managerial quality and historic performance.

“We will be monitoring the performance of our independent fund managers and others in the market. Based on this evaluation we are prepared to change to a better performing manager if considered necessary.

“This provides us with a key point of difference to the many other schemes being provided by financial institutions that will only offer funds run by themselves. If those funds don’t perform they’re unlikely to sack themselves and put in a competitor’s product.

“Investors in the Staples Rodway KiwiSaver scheme can take heart in the knowledge that their fund is being constantly monitored by an independent provider, with the objective of achieving consistently good performance over the long term,” added Scarr.

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