KEY POINTS:
Four of the country's biggest unions have jumped into the KiwiSaver business - just one working day before the new savings programme starts on Sunday.
The National Distribution Union, Nurses Organisation, Service and Food Workers Union and Engineering, Printing and Manufacturing Union had their "Iris" KiwiSaver scheme registered by the Government Actuary yesterday.
The scheme's sole paid employee, Peter Gosche, said the four unions and others supporting the scheme had about 200,000 members all up.
"We are not going to get them all but if we could get a slice we'll be happy," he said.
The scheme has been set up through a trust established by the unions in 1990 to offer a low-fee superannuation scheme with minimum contributions as low as $5 a week.
Mr Gosche said that scheme, which has 5000 members and assets of $25 million, had been trying to do what KiwiSaver would now do on a wider scale. About 80 employing companies sponsor the scheme by paying some of its costs, and 30 to 40 of those paid in $5 or $10 a week or matched their employees' contributions to the fund.
"We have workers that would not have got involved in super before who are now saving small amounts," Mr Gosche said.
Many workers earning less than $30,000 a year would not be able to pay 4 per cent of their incomes into KiwiSaver straight away and the unions hoped to negotiate deals where employers paid in half of the 4 per cent for them.
Such "2 plus 2" deals are possible under the KiwiSaver Act passed last year. The Government signalled in last month's Budget that this option will be closed once employer contributions become compulsory next April but this gives the unions a nine-month window in which to negotiate shared contributions. "I'm telling people on under $30,000 that 2 plus 2 is the way to go," Mr Gosche said.
"That's one area the unions are going to try and convince employers is a good idea, even if they don't set it up till just before April 1.
"They don't have to go to 3 plus 3 until April 2010 and then 4 plus 4 from April 2011.
"So the 2 plus 2 can continue until 2010. That's a vital beginning point for unions."
The trust, named "Iris" after Australian union super schemes known as "industrial retirement and insurance services", plans a flat fee for its KiwiSaver scheme of $1.15 a week for contributors or 80c a week to maintain an account during a "contribution holiday".
