Compulsory KiwiSaver inevitable: Superann provider

Prime Minister John Key has ruled out making KiwiSaver compulsory, but a superannuation provider says it is inevitable the scheme will eventually go that way.

Under the current scheme, people are automatically enrolled when they start a new job and are given the choice to opt out.

Mr Key said the Government is considering an option in which those who have not moved jobs since the scheme started would also be automatically enrolled, but that the scheme would not be made compulsory.

However, Tower Investments chief executive Sam Stubbs said he believed eventually KiwiSaver would move in that direction.

"I think ultimately we will get to some form of compulsion," Mr Stubbs told Radio New Zealand.

"It's not too critical whether it's compulsory now or not, but the fact that you are encouraging people to save for their retirement is the most important thing."

Mr Stubbs said compulsory savings would be necessary if New Zealand wanted to move into the same realm as countries like Sweden, Denmanrk and Singapore.

"They are small countries, they have small populations, but they have very large savings pools and in order to....get very large savings pools you're probably going to have to have some element of compulsion," he said.

"I think most Kiwis would agree that it's a pretty reasonable ask to say that if you're working and receiving a wage you should be putting away something for your old age."

Mr Stubbs said he thought businesses would also welcome a compulsory scheme.

"Business in this country would want to be running their businesses in a country that has a large pool of money available for investment. KiwiSaver, right now, is getting nine out of 10 every savings dollars in New Zealand and the size of that pool could be very significant for business long term."



Add a Comment