- Date published:
11:54 am, May 29th, 2015 - 60 comments
Categories: benefits, kiwisaver, quality of life - Tags: hypocrisy, kiwisaver
As widely reported:
Govt considers automatic KiwiSaver enrolment
People will be automatically enrolled in KiwiSaver under changes being considered by the Government. All workers would be automatically signed-up to the retirement scheme under the change, unless they asked to opt-out.
National had previously considered such a move, but ruled it out as too expensive. Finance Minister Bill English said that mass enrolment was now more affordable in the wake of the Government’s snap decision to drop the $1000 kickstart, announced as part of Budget 2015.
[English:] “It would catch a whole lot of people who might want to reconsider being in KiwiSaver, because it is a pretty good deal – they get the employer matching subsidy, and the government subsidy. “There is really no other investment they can make – or no other form of savings – that can match the return of KiwiSaver.”
Nice to see English acknowledging the importance of Kiwisaver – thanks Michael Cullen, thanks Helen Clark! I certainly support default enrollment. But isn’t it odd, from those who went ape shit over light bulbs, there is not a word against this Big Government Nanny State PC Gone Mad idea…
It’s a way of tackling super without tackling super.
No, not really. The current rules is super is a certain amount of the average wage, and paid to everyone at 65, with no means testing or abatement.
That policy is still unaffordable based on forward projections. If a future government then brought in kiwisaver balance as part of the eligibility equation (which seems quite likely), they would therefore have to change the existing super legislation, and therefore would be “tackling super” in doing so.
So this is just more passing-of-the-buck to a future government, but this current irresponsible short-term government.
Agreed – i should have said “appear to be tackling super”. As i’m sure that will be the rationale.
Do these forward projections take into account climate change? The end of the fossil fuel economy? If not, why are we even pretending to take them seriously?
I mean, what does “unaffordable” even mean in an era where there are gigantic stock piles (hundreds of billions worth) of electronic currency and financial assets denominated in NZD?
No, they don’t.
So if you take those things into account, then they’re “really unaffordable”.
Which is why I am asking you to look at the problem not from the standpoint of whether or not the electronic ledgers and the spreadsheet cells balance out, but whether or not NZ can create and sustain a real physical economy able to deliver the quality and quantity of goods and services needed to maintain an older population at a reasonable standard of living. At that point, working out how to “pay for it” is simply a matter of financial contrivance, entering the required sums via keyboard strokes.
Kiwisaver is a good scheme, and this is essentially a move towards making it compulsory. I expect it will be compulsory before the end of the decade. And good news too, and it will generate wealth for both NZ, and as part of that for many people who would never have had the opportunity or inclination to otherwise save
If the government also repeals their previous change that allowed employers to saddle their employees with their contribution as part of a “total remuneration” package, then yes.
This is a terrible development right on the back of new rules being introduced to ensure that false claims made by providers cannot be prosecuted.
No it’s not. It’s more pretend and extend brought about by our present delusional financial system that most people pretend is economic.
It would be interesting to see what investment companies are behind the various kiwisaver investors, and to see if anyone connected to any National Party persons have a vested interest in any of those companies.
I could imagine many of those companies potentially failing in future economic crisis’ and many people losing their kiwisaver money. Imagine having your kiwisaver account, which you’ve saved into for your entire life, be emptied.
As you would know, big companies can fail as evidenced by the bailouts of 2008 (or whenever it was).
Would have thought it was a bit too “nanny state” for them … It’ll be compulsory unionism next.
“But isn’t it odd, from those who went ape shit over light bulbs, there is not a word against this Big Government Nanny State PC Gone Mad idea…”
Strangely it’s been Metiria Turei attacking the government, on the defense of low wage earners, who will be forced to lose some of their income “without knowing how to stop it”.
Kiwisaver providers are concerned that without the $1k kickstart as a buffer, they either have to either insist on a minimum opening deposit or forego income in situations where enough money has not been added to offset the annual management fee deductions – eg: children, beneficiaries. Maybe it was originally included in the scheme partly as a concession to them?
Originally there was a $40/year fee rebate from the government, which allayed those concerns of the providers.
National scrapped that in the 2009 budget, leaving the $1k buffer as the backstop. Now they’ve scrapped that too.
Next Budget they’ll probably remove part of their $520/yr or tip the contributions balance further onto employees rather than employers. So ambishus.
so will the government than also guarantee that the money saved compulsory will be paid out when people reach 65 or 70 or what ever the retirement age will be?
My question exactly, but I’d be using a more skeptical tone.
What will happen if another global financial crisis happens?
I recall that quite a few people with their 401k’s in the states that lost an afull lot of money that they set aside for their retirement to supplement their social security payments.
This is what I would like to know, if someone starts contributing today as a 20 year old, how can the government guarantee that that 20 year old will see his savings paid out once he is a 70 year old (and yes retirements ages will raise – no matter how much crying is to be done, i fully expect to work till i fall in a box).
Well they don’t, and they wont.
Is there a quick summary of what americans 401Ks are?
it is not so different both employer and employee contribute, the money is invested and payout is made possible at the time one goes to retirement, or earlier albeit with penalty fees for early access.
This is a summary from the IRS
There is a similar system in Germany, where again both party contribute, and the money is invested but , and that is a big difference BUT, the money is available to the saver every 6 years in full. It used to be the building/dowry saving system.
I think that every 6 years availability makes much sense, if you are an apprentice starting to work at 15 this money would be made availabe at age 21. Enough to buy a car, go to study, travel etc. Or it can be left where it is and will be made again available 6 years later at which time someone might want to get married, buy an appartment, has a child or start a business.
No whinging and whining is needed, no reasons need to be given etc. The time has run out, the money is available in full to the saver.
Again, i have a Kiwi Saver, and frankly the money that I have there would have been put to good use in my business but I can’t access it. It would have been put to good use when I was unemployed, but I can’t access it. Etc etc etc etc etc.
I do think that for someone who has no debt, paying into this scheme is ok, however for someone who has debt, be it a student loan, a mortgage or any other form of debt it is financially unwise to save (longterm with no guarantee of payout) rather then use that money to pay debt and interest faster.
Also, how will it factor in with minimum wage workers, those that only work a few hours per week etc. Will Winz make up the lack of available cash to these savers?
So if the government wants to make this system compulsory, than they must to some extend assure the forced saver that at the end of the day (TM) it will be payed out. Unless and Until the government does offer that guarantee (and both Labour and National are not willing to do that obviously) it is nothing but a form of wage theft benefiting financial institutions.
Better choose your provider wisely then
mate, there is no such thing as decent financial advice.
There are a lot of wanna be financial advice givers that pay themselves nice fees out of your savings, but if the go bust, so do you.
Now, normaly i would not cry for someone who invests and looses, such is business and risks need to be assessed before entering any savings scheme or investment scheme to prevent any pitfalls.
But we here are talking about people being forced into the scheme, people who may or may not be financially aware enough to actually make sense out of the banking gibberish, but i would assume that for about 30 % of the working population that is not the case.
but well what do I know,…….the banks are already crying foul, the money give to the kiwi saver initially was to pay for fees and such, and now…that might eat into your savings.
: KiwiSaver providers could introduce minimum amounts for opening new accounts or minimum saving requirements in the wake of the Government’s snap decision to cut the $1000 kick-start.
The incentive which was available to everyone who signed up to the retirement savings scheme had been a buffer should account fees or a downturn in the market eat into savings.
But Bill English’s Budget announcement last Thursday instantly removed the $1000 grant, taking away that security and opening up the potential for low-balance accounts to be eaten up by fees.
no if the government wants compulsory savings, the government must make it save or else the government should simply leave it to people to join or not.
And if/when you withdraw money to buy a house, you still have to leave $1000 behind…
Default providers will accept no-deposit enrolments because otherwise they will lose their default status.
It’s not that hard to have a transition account which is then used to purchase units in the KS fund once the balance is high enough. The banks are just being obtuse.
There are increasing cries to get out of the financial system, the latest one I read was yesterday from Jim Sinclair.
“But isn’t it odd, from those who went ape shit over light bulbs, there is not a word against this Big Government Nanny State PC Gone Mad idea…”
Why do you say such stupid shit? They are not alike even one bit.
[lprent: Banned for two weeks. If you want to attack what an author wrote, then explain your logic in disagreeing with the content. Don’t attack the author. ]
Why do you say such stupid shit?
For the fame and the money of course. Mostly the money. Doh.
Try posting on here for the VRWC then, it pays well but the cheques take a while to clear
An employer refusing to pay? That would never happen with the Vast Left Wing Conspiracy, since it’s a unionised conspiracy. You should swap sides if you’re tired of your current employer messing you around. Also, free dental.
Hahaha, I was going to reply to you in another comment thread saying the following – “Puckish, how much do you get paid to post on here?”.
I doubt you are giving your masters their money worth.
Do you get your brief either from a) the GCSB, b) directly from a person/company, c) from the National Party, or d) directly from the global elitists?
How did you come to have contact with such entities?
How long have you been being paid to do this type of “job”.
Do you work out of NZ or abroad?
Does the brief change, or is it always the same?
How long have you been doing it for?
What other websites do you attend for this purpose?
Do you have a similar role to this, except without being internet based?
Do you know other people who do the same?
Is there an accredited qualification for such a role?
Is this your only form of work?
Are you a part of “The Brotherhood”? (you could know what I mean).
All assuming my analysis of your purpose is correct.
According to the KiwiSaver website “When you start a new job, if you’re not already a member and are eligible (aged from 18 to 64), your employer will automatically enrol you in KiwiSaver.” Then you have 8 weeks to ‘opt out’.
So, what is it exactly the Tories are going to do? Auto-enrol those already in a job but who have already opted-out of membership, but still give them the option to ‘opt-out’ again once they are auto-enrolled again?
The idiot media have been suckered again, by the looks. Too easy. Lazy craven fools. No wonder they are non 50% in the polls.
Kiwisaver – with no opt-out, it’s a (possibly inadvertant) compulsory tax on the poor. The working poor might actually die before they see any of it, and no one in Auckland signing up today is ever going to use any of it to pay for a house deposit.
If Muldoon hadn’t ever existed, I could consider trusting a sane government to hold onto my money for 40 years. But alas, history exists. Would any of you trust a bunch who endorse the assault of hospitality workers? Who bribe old Saudis they tried to screw? Who break their own laws? What about several governments who only increased poverty in NZ? These are the people we should trust to hold our retirement money?
I’m not saying don’t do it, you don’t have a choice now anyway, and finding an exempt employer might be hard for anyone low-skills and just trying to eat. (unless Socialism and Public Servants make a big come back) – I’m just saying I wouldn’t, and I wouldn’t cheerlead it either. The rot in our economic mindset is too advanced to be thinking about retirement savings. It’s like stacking yoga mats at the base of a cliff as the middle-aged lemmings start falling.
You are right of course. Many have other costs they would be better off paying down (credit card debt etc, medical bills because you may need to keep seeing the provider of treatment so best not to default).
What about those who are permanently unable to work? At this point in time many disabled cannot use Kiwisaver because they already can’t afford to contribute due to higher costs. Q: Why should anyone pay, and pay…and then pay again in retirement because they couldn’t work earlier?
Bear in mind there are other allowable withdrawals besides first home and retirement, and if one scheme won’t do it, switch the funds to another scheme that will. Financial hardship and medical treatment are two such options.
Before we all go celebrating, just be clear in your own mind that Kiwi Saver is a funnel of workers monies into private hedge funds and the ticket clipping Wall St casino.
Personally, I don’t think that this is anything to be celebrated, and in fact, puts a huge amount of NZ financial capital at risk.
Is there an easy to understand public record of the investments?
I don’t think so, but even then I don’t think it would help. All the subprime mortgages which failed in 2008/2009 had fancy names and were AAA rated. So it all looked good from the top level. It was all toxic trash when it came out in the wash, of course.
I was thinking more about coal/oil investments and how visible that is.
Well, there will be plenty of unethical/ungreen investing going on.
As far as I’m aware: no.
If you’re not already in KiwiSaver you essentially have to approach every single KS provider separately and ask for the details of all their different funds.
There’s a calculator on sorted.org.nz which “compares” KiwiSaver funds and providers but only on the basis of fees, returns, and “services” (like checking your balance online).
I’m not in KiwiSaver myself for a variety of reasons including the ones CV has noted, but I’ve known several people who wanted to invest in “ethical” funds and had a hell of a time trying to find the information.
Y’know how AGW is going to take our economy away from us…?
Yeah, exactly. Check out the disconnect. The Left is certain that AGW (and from my point of view, resource depletion) is a grave threat to our civilisation and that we are right on track for disaster over the next few decades. And the financial markets are going to do what at that time?
I don’t think the Left is certain of that. Most of the left believes we have time to change to avert disaster. But I agree there is a disconnect. I see it in people who understand about peak oil and what will happen with the GFC and they still take on big, long mortgages. Maybe they think that when the shit hits the fan they get to keep their houses.
When our economy is trashed before our eyes, (I suspect it will be quick – certainly months as opposed to years and quite possibly mere days) I see no reason why people wouldn’t get to keep living wherever. It’s going to come down to, amongst other things, brutal numbers. How many people will be suddenly jobless? How many people will be unable to service their debts? How functional will those institutions be that are looking to repossess?
I suspect priorities will be somewhat different to both now, or in the aftermath of the GFC seeing s how that didn’t involve either the collapse of physical infrastructures, or a wrecking of our systems of production and distribution.
A hard crash yes, I agree. Plus all those houses that currently stand empty around the country will be up for grabs.
But I think it’s likely before then that we will go through cycles of instability that aren’t enough to collapse the economy but are enough to push many people towards not being able to pay their mortgages. And depending on how it goes and what sort of govt we have at the time, I’d expect credit checks to get harder, so people losing a mortgaged house might not be given tenancy. It might not go like that, we might get a resurgence in kindness, but I take Chch as a prelude and look how people there have fared in various ways.
That time ran out circa year 2000, IMHO.
The 1970s was when we really had to start doing something about becoming sustainable. Instead we went for more money and we still here how being sustainable isn’t affordable especially from the goons on the right-wing.
Yes, because people have let the money side of economics dominate the ‘ECONOMizing of resources’ side of economics, and the ‘ECONOMizing of resources has become a side effect.
Rather than having the ‘ECONOMizing of resources’ as the prime driver, and money being a side effect.
This WILL cause the planet to NOT be livable in the future.
Basically we’re sticking our middle finger up at our future children and saying “F$#k you”, I’m getting my money no matter what I contribute to resource depletion.
All under the guise of “economic growth”.
I’m probably writing what you already know.
It’s a sorry state of affairs. Do none of these 55 plus year old boomers in our nation’s senior leadership roles have grandchildren?
Our economic system is uneconomic.
Note that only a sub group of adults will face the compulsory sign on- those in salaried or waged jobs so that they can provide capital to the ruling classes.
Also there is still considerable doubt as to when & how kiwisaver is protected from creditors. So someone loses job – defaults on mortgage – is left with an outstanding amount to the bank – who leave it there accruing interest until 65 or whenever and the bank step in and take the lot.
Can also see a future government tapping it for fees, penalties and taxes that are owed to government – nice to have a little fund of peoples money to backstop those things. And where are the backstops for the low earners or non earners for part of their career. Australia shows that some groups can’t save enough and this will be the end of universal super.
There would be a lot of low wage workers who would find that having 2% of their wages each week whipped from them to be handed to the financial services industry, is going to make paying their bills a bit harder.
Brilliant move from the Tories though, Labour cannot speak with any strength against the measure.
And will the contribution be enough to pay the fees.
is kiwi saver subject to open bank resolution policy?
national has shifted the goal post every budget i just keep thinking when the real crash arrives these pools of capital the Cullen fund and kiwi saver funds could be confiscated in an emergency. the savers will be used to bailout the speculators and pushers of vapour wealth.
the 1000 dollars kick starter is a confiscation as is the tax on the employers contribution and loss of 1000 dollars year tax credit .
Hardly surprising; remember this is a Labour-lite administration, too scared and unwilling anyway to back away from anything the previous Labour Government did, leaving everything Labour created in place, backing away from RMA reform, embracing the AGW religion, etc. True conservatives – without an original idea in their hollow heads, tinkering around the edges but essentially changing nothing.
As the government is running out of tax funds new avenues have to be found to a/ get more cash (like the air port tax) or b/increase kiwi owed shareholding against it can borrow. No employer is obliged to pay into it, the government has opted out of a contribution and the ordinary taxpayer is once more ready to be taken to the cleaners. The debt will eventually nullify the fund but really who wants to look at the fine print. All the good intentions are down the drain as the farmers need to be bailed out and the asset sales have done nothing other then depleting the cash pot even more. The endless chain of gimme gimme has started and I am really surprised that anyone wonders why no one want’s to invest into – just about anything.
Kiwisaver is nothing other than a subsidy for the sharemarket – and have you seen what that is doing lateky – it is a PONZI scheme – the sharemarket is being force fed with money from every working stiff’s weekly pay packet to fund the excesses of the few and we are competing for earning assets with every other retirement scheme across the planet. Kiwisaver is taking 6 – 8% of the weekly wage of everyone in NZ and giving it to the speculators. It is a rort. Kiwisaver is making John Key’s mates richer and everyone else poorer.
Gareth Morgan made $58 Million from selling “his” kiwisavers to Kiwibank – yet he was running one of the poorest performing schemes in the whole show – his victims would have been better off with their money deposited in kiwbank term deposits
Your Kiwisaver will, if it survives that long, be nearly worthless by the time you retire – if it does si=urvive that long maybe you will have saved enough to buy a casket and pay for your funeral – you certainly will not have saved enough to fund anything like a decent retirement.
you are better off paying off your mortgage because once your mortgage is gone it is gone and you have a real asset – plus you are paying the interest on the loan at after tax income – your Kiwisaver could go up in smoke tomorrow and the system knows that and admits it as is illustrated by the following extract from the kiwibank disclosure statement …
“Investments made in Kiwi Wealth KiwiSaver are subject to investment and other risks, including possible delays in payment of withdrawal amounts in some circumstances, and loss of investment value. No person, including Kiwibank, NZ Post or any other member of the NZ Post Group, us, Gareth Morgan Investments Limited Partnership (GMILP), Public Trust as trustee of Kiwi Wealth KiwiSaver, or any of their respective directors, or the New Zealand Government guarantees the repayment of members’ interests in Kiwi Wealth KiwiSaver or the payment of any earnings or returns on investment in Kiwi Wealth KiwiSaver.”
In the average wage earners lifetime there will be three or four sharemarket crashes and financial crises any one of which could result in a substantial write down in the value of your kiwisaver savings – but your mortgage wont go away – indeed the interest on that will go through the roof aright at the time your “savings” that you can’t access have gone through the floor.
more one this at ..