Govt considers automatic KiwiSaver enrolment

Investigative Reporter·NZ Herald·

28 May, 2015 10:55 PM2 mins to read

There are no more $1000 kickstarters for new KiwiSavers. Photo / NZ Herald

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.

However, the move would still carry significant cost and it is unclear when it might be implemented, if at all.

In 2015/16, the Government is forecast to spend $705 million on the KiwiSaver Member Tax Credit.

Before the last election National promised a one-off mass compulsory enrolment when the Government's books were back in surplus.

The Budget estimates that the current year will post a $684 million deficit, and forecasts a tiny surplus of $176 million for 2015 - 16, rising to $1.47 billion in 2016 - 17, $1.99 billion the next year.

"We are keen on this mass auto-enrolment. That is auto-enrolling everyone who is not in the scheme so that they then have the opportunity to opt-out," Mr English told Radio New Zealand.

"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."

Mr English said the proposal would be examined in the next six to 12 months.