KiwiSaver auto-enrolment shelved

A delay in introducing auto-enrolment in KiwiSaver will save the Government about $514 million as Finance Minister Bill English continues to promise a return of the government books to surplus in 2014-15.

Mr English said the auto-enrolment would proceed when the Government had sufficient surpluses to meet the forecast costs.

"Proceeding with the auto-enrolment in 2014-15 is not now possible without putting the surplus at risk."

Public consultation would now be deferred until after 2012 and the policy would not be implemented until after 2014-15, he said.

Forsyth Barr superannuation specialist Damian Foster said KiwiSaver already had nearly two million members, with thousands more joining each week.

"I'm sure we haven't heard the last of the rules surrounding compulsory KiwiSaver membership in the future."

Mr Foster was comfortable with a gradual growth in KiwiSaver membership, rather than having a one-off hit of the 500,000 new members.

"It would be nice to see everyone saving for their retirement, but it is not that simple. Even a 2% contribution is hard for some people to find. Eventually, we hope everyone will be making some savings for their retirement."

However, the new disclosure rules announced by Mr English would have a positive effect on KiwiSaver contributors, Mr Foster said.

Mr English announced that from April 1, 2013, fund managers would be required to report their performance and returns, fees and costs, assets and portfolio holdings, liquidity and liabilities, and key personnel, along with any conflicts of interest, in a standardised format on their websites.

Under the changes, investors would be able to compile league tables. That would increase competition between providers and allow investors to make direct performance comparisons.

Mr Foster said many savers thought that was already the case and could not understand why comparisons were not readily available.

It came down to the different processes fund managers used to charge their fees and how those fees were interpreted by savers.

The changes announced by Mr English were a welcome addition, he said.


The changes
• Auto-enrolment delayed, saving more than $514m.
• New disclosure rules will allow for comparison and competition.
• Reviewing the rules and arrangements of KiwiSaver default providers.


Add a Comment

 

Advertisement

Our journalists are your neighbours

We are the South's eyes and ears in crucial council meetings, at court hearings, on the sidelines of sporting events and on the frontline of breaking news.

As our region faces uncharted waters in the wake of a global pandemic, Otago Daily Times continues to bring you local stories that matter.

We employ local journalists and photographers to tell your stories, as other outlets cut local coverage in favour of stories told out of Auckland, Wellington and Christchurch.

You can help us continue to bring you local news you can trust by becoming a supporter.

Become a Supporter