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Fundamentals of KiwiSaver remain positive
20 May 2011
New Zealanders should hold fire when it comes to making changes to their KiwiSaver, according to the Retirement Commission.
At yesterday’s Budget it was announced that the KiwiSaver member tax credit rate would be halved from 1July 2011. The minimum employee contribution would rise from 2 to 3 per cent, and compulsory employer contributions would also increase to 3 per cent from 1 April 2013.
Retirement Commission Executive Director David Kneebone says while changes to KiwiSaver can shake people’s confidence in the scheme, it’s important not to become disillusioned with KiwiSaver.
“The changes announced yesterday won’t significantly affect the total amount that people could save via KiwiSaver.
“And, if you are currently contributing 2 per cent to your KiwiSaver you will have two years to prepare for the 1 per cent increase from 2 to 3 per cent.”
People need to take the time to consider their options carefully and think about their own individual circumstances, rather than be panicked by changes to the scheme, he says.
“The fundamentals of KiwiSaver are still positive, because of the government and employer contributions.”
Mr Kneebone says ideally KiwiSaver would be left untouched for a long period of time so that public confidence in the scheme isn’t eroded.
“Stability is crucial for confidence in KiwiSaver. We want to encourage Kiwis to get into a habit of long-term saving for their retirement. And, to do that, they need to feel confident their savings are secure and the money they expect to receive will be there for them.”
Sorted.org.nz is updating its Quick KiwiSaver calculator so that KiwiSaver members can see how these changes affect them. Visit www.sorted.org.nz/calculators.
ENDS
For more information contact:
Meredith Keys
(027) 203 3172
meredith@sputnik.co.nz
