Sharechat Logo

KiwiSaver's gain is other savings vehicles' loss, English says

Tuesday 13th March 2012

Text too small?

Growth in the KiwiSaver scheme is being offset by declining funds in other investment vehicles, though New Zealand’s still better placed than most to deal with a rising pension bill, according to Finance Minister Bill English. 

In the past 12 months, KiwiSaver funds under management grew $2 billion to $11 billion, of which $950 million came through government subsidies, English said at the launch a retirement savings survey.

“It is a better vehicle, and people are responding to that, but actually you only get more savings when you save more,” English said. “If funds are moving from other managed vehicles to this one, we may or may not be better off.”

English said the government hasn’t formed a view on the looming review of KiwiSaver default schemes, but that it has to be completed by 2014. In that review, options such as the life-cycle option, where investment risk-weightings decrease as members get older, will probably be considered.

“If they are going to stay with the default funds in significant numbers, there is a significant interest in whether those funds are the right kind of vehicle for everybody,” he said.

English said there are signs New Zealand’s savings rate is improving, and the government is going to be better placed than developed nations in the Northern Hemisphere that have embarked on lengthy austerity programmes after decades of debt-fuelled consumption.

“Our retirement arrangements are fundamentally sound - in a lot of these other countries they’ve got big pension liabilities that have to be met by governments in commercial markets when they’ve got these huge debt problems,” he said.

English launched the a new retirement study by the New Zealand Centre for Personal Financial Education, a joint initiative between Massey University and Westpac Banking, and Workplace Savings New Zealand. The study will essentially benchmark what a person needs to save through the course of their lifetime to meet various standards of living, and across different regions.

The survey is likely to be released in August, and will be updated on a six-monthly basis in line with the consumer price index, with a more detailed review every three years.

BusinessDesk.co.nz

Bond Offer: Infratil Ltd, 7.2 year & 10.2 year unsecured unsubordinated bond


  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

NZ dollar sags after avalanche of data and central bank action
Fonterra board starts planning chair succession
Fulton Hogan keeps Australian civil construction unit
Time for congestion pricing has come - NZIER
Colliers defends KiwiBuild as 'far from a colossal failure'
Pushpay shares rise as cost-cutting upgrades earnings guidance
20th September 2019 Morning Report
NZ dollar weaker against British pound on EC president's Brexit optimism
Todd plans Kapuni drilling campaign
MARKET CLOSE: NZ shares gain; appetite for KFC helps Restaurant Brands hit record

IRG See IRG research reports