New Zealand has broken new ground with its superannuation-focused KiwiSaver product being opened up to those aged over 65.
The change is included in a Taxation Bill introduced to the New Zealand parliament this week and has been welcomed by the New Zealand Financial Services Council (NZFC).
NZFC chief executive, Richard Klipin noted that the changes in the legislation opening KiwiSaver to over 65s, establishing new employee contribution rates of 6 per cent and 10 per cent, and reducing the maximum contributions holiday that people can take from the scheme from five years to one year.
“These changes are positive and if passed will significantly strengthen KiwiSaver and support its continued growth,” Klipin said.
“The FSC, industry, the Commission for Financial Capability, and many others have been lobbying hard for these changes to happen and the Government is to be applauded for listening to this and acting,” he said.
Klipin said the proposed changes had been supported by three major pieces of research that the NZFSC had undertaken looking at New Zealanders views on KiwiSaver.
“The first ‘Growing the KiwiSaver Pie’ showed overwhelming public support for boosting the scheme and improving Kiwis access to it,” he said. “The second ‘Great (unmet) Expectations’ found that older New Zealanders face a significant weekly income shortfall in retirement. The third ‘Generation KiwiSaver’ found that under 35s will be reliant on KiwiSaver as their main source of retirement income.”
Klipin said the consistent message across all three pieces of research was clear public support for strengthening KiwiSaver and a call for Government and industry to do more.