Workplace super drops by two thirds

The number and value of workplace superannuation schemes has suffered a huge decline over recent years as people switch money into housing and other investments, including finance company debentures, fund manager AXA says.

Releasing the second annual international Retirement Scope survey yesterday, it said the decline had seen the country's savings rate plummet.

The survey found New Zealanders were among the worst savers, on average putting away $423 a month, against Americans who saved about US$1253 ($1851).

AXA chief executive Ralph Stewart said New Zealanders' relatively poor savings record could be attributed partly to a "massive decline" in workplace savings schemes.

"In the last 10 years, we've seen registered superannuation schemes offered in the workplace drop by something like two-thirds. We've gone from something like 2200 registered schemes in workplaces around the country to something like 500 or 600."

The workplace for many years had been the traditional avenue to save for retirement. "To some extent, the Kiwisaver is trying to address that, to attack the issue of savings before it becomes disposable income."

Stewart said much of the cash that might have previously been saved through workplace schemes was now being invested in managed funds, which had grown hugely since the mid-eighties. More recently, huge amounts of cash had gone into finance company debentures and property.

AXA head of marketing services Chris Watney said the survey showed New Zealanders were leading the world in terms of relying on real estate "as the one asset that will see us through retirement".

Meanwhile, AXA's survey also indicated New Zealanders were among the happiest people in the world, just behind Americans and just ahead of Canadians and Australians.

New Zealanders also had positive attitudes to retirement, which was "probably not founded in realism", Stewart said, as few knew what their exact retirement income would be.