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Nostrils twitching over super

Rob Hosking

Wednesday 31st January 2007

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It's not quite "wake up and smell the coffee" time, but Axa's latest global retirement survey shows New Zealanders' nostrils are at least starting to twitch.

Axa's annual survey of OECD countries (plus China) shows New Zealanders are more aware of the issues around their retirement, and that more are saving. It also shows a rise in awareness of KiwiSaver.

Axa New Zealand chief executive Ralph Stewart says the survey shows firstly, that few New Zealanders, especially those under 45, expect the state funded superannuation to be available in its current form when they get to retirement age.

And most - more than two thirds - expect "significant policy reform" in superannuation over the next decade.

However, they do not want that to include a rise in the official retirement age, and they are overwhelmingly opposed - by two to one - to raising the age.

That, says Stewart, raises the question of what major policy changes people expect - and he supplies one possible answer.
"You cold interpret that as saying there is increasing appetite for mandatory retirement savings. It's a bit of a reach but here's a softening of attitudes over mandatory sayings."

The government's KiwiSaver workplace savings scheme, which starts in July, will provide a platform for that, he says.

"KiwiSaver is developing an infrastructure we didn't' have before, and that in itself will increase savings. A key part of that is the role of the IRD as a collection point, and the next step to mandatory savings should not be that hard."

The study, which compares New Zealanders savings habits with those of other countries, shows an increase in savings since last year, but also a growing awareness among respondents that they are not doing enough to save for their retirement.

And Stewart says that is coming through" in a commercial sense" in interest from potential customers.

"The government's tax changes last year have helped. They make managed funds more attractive and we are seeing more interest from people with a lump of cash to invest."

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