Sharechat Logo

Retirement Scheme gets report card

Monday 21st February 2005

Text too small?
Many public servants have been confused by the government's new State Sector Retirement Savings Scheme.

An evaluation of the scheme compiled by Litmus for the State Services Commission reports that many employees felt overwhelmed and overloaded by the information they had to digest about the scheme.

"Some employees were feeling overloaded with information ....thus some of the additional details about SSRSS were less well heard."

That confusion seems to persist. Of those surveyed for the report, 5% didn't even know which of the three providers (ASB, AMP or Axa) they had chosen, and 10% didn't know why they had made the choice they did.

There was also "evidence of confusion about the level of risk most suitable given time to retirement", which will give strength to those who argue for much better information about financial literacy.

A third of those who selected low risk products were a long way from retirement and did so because they felt they had a long time to go.
Conversely, 9% of those who selected high risk products did so because they were close to retirement and wanted to earn as much as possible.

And 12% don't know why they selected the level of risk they did.

Despite that, those who joined have expressed, in the main, satisfaction with that decision.

With one provider - ASB - scooping more than half of those eligible, the reasons for provider choice will probably be the area of the report most poured over by the financial services industry.

However there is not much to go on. The two most popular reasons given for choice of provider were "offer the best investment fund" and "familiar and known brand" - both at 18%.

The second most popular reason for choice, at 13%, was that the employee used that provider for banking or insurance or other services.

Of those that did not join the scheme, 30% said they already had adequate retirement provision. The second largest group, said they could not afford to join.

The study though indicates a marketing opportunity among this second group - the government is to double its contribution to the scheme, from 1.5% to 3%, from July this year. Awareness of this was particularly low amongst those who have yet to join.

Of those who did, the subsidy was cited as a major drawcard, amounting, as it did, to a virtual pay rise.

NOTE: please be advised to read full articles from Business Desk Website, you will have to pay a subscription fee on their website.



  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:

Fonterra resignation spooks Shareholders' Council
State power profits below budget
Free flights cost more
Fonterra merges rural companies
Quality mark for juice industry
NZ business in credit rating tailspin
Government rejects power profiteering accusations
'People's Bank' to rate with the big boys
Sovereign fattens ASB's bottom line

IRG See IRG research reports