Poll finds strong support for compulsory KiwiSaver
New Zealanders who responded to a new poll are overwhelmingly in favour of some form of compulsory saving.
The survey of 3177 respondents, carried out by Horizon Research for the Dame Jenny Shipley-chaired Financial Services Council, shows 74% believe New Zealand should, over time, introduce a retirement savings scheme with compulsory contributions from employers and employees.
Only 16% opposed the idea, the survey shows.
It asked a number of questions on compulsory savings, and although all received different results, the broad message is favourable to the idea.
Asked about the Financial Services Council's proposal of phasing in contributions up to 10% of income, with 5% from employers and 5% from employers, 72% are in favour.
The more specific the proposals get, the survey seems to show, the lower the support is – although it still records a majority in favour of some form of compulsion.
Slightly more than half – 52% – support the idea of contributions being made of 0.5% each year by the employee and employer over 10 years, until the annual total reaches 10% of an employees’ income.
Asked whether they thought making KiwiSaver compulsory would be good for New Zealand – regardless of whether they personally favoured the idea or not – 63.7% are in favour, with 26.7% preferring voluntary saving and 9.6% who didn’t know.
Those surveyed also gave more general feedback, and the report notes there is strong support for not changing the current entitlements for the state-funded pension for those in or near retirement, and also that any change would need to be to a model that is as simple as possible.
"This survey finds any compulsory scheme would have to be flexible, allowing such things as being able to withdraw funds to help buy a first home, allowing contributions for children and grandchildren, and perhaps allowing employees to manage their own funds in a compulsory retirement savings scheme if they wished to do so," the council said.
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Comments and questions11
I wonder how many of the poll respondents would have voted favourably, if the Government contribution from the taxpayer, and the employer contribution were stopped completely.
Yes I would expect that. The majority of people have joined Kiwisaver and they would vote in favour. The people who have not joined can not pay for it or have a good reason why do not join Kiwisaver (e.g. private plans . So what do you achieve by making Kiwisaver compulsory?
Kiwisaver is looked upon as the solution but it is quite an expensive scheme, tax free savings (within a limit) would cost a lot and would really encourage people to save (so it can be borrowed to NZ businesses) and not to invest in property. Why has this not been announced in this years budget is a complete mystery to me to be honest.
You do not need compulsion or kiwisaver to save.
Feel free to undertake your own scheme or are you only interested when the money for you is coming from someone else.
Remember governments dont have money,they always take , by force, from else where.
This is why Labour want to raise the age of Super - use Kiwisaver to start means testing, and save Super for the sick, lame and lazy rather than all NZer's. Don't believe the socialist spin!
Well, putting aside the immorality of compulsion - why do we always go there? - what if modern portfolio theory doesn't work in our crony capitalist systems.
(This post brought to you by 'always on topic self-promotions'. NBR delete if you like ;) )
This poll shows how financially immature we are when we have to look at compulsion as some form of sinecure to cover a growing inability to do things for ourselves.
You have to ignore the rational debate we can all have about voluntary savings and look at the lowest common denominator - compulsion is a necessity because there are so many out there who will p*** the week's pay against a wall every Friday night (i.e. not save) and expect you and I to pay their super in retirement (while we pay our own too).
Of course most of those respondents are already in Kiwisaver. If it is made compulsory myself and family and many other I know will leave the country. Compulsion is BS!
Which country are you going to go to?
Universal compulsion is wrong because it leads to an inefficient allocation of an individual's resources - most obviously paying tax on interest on savings whilst also paying interest on a mortgage. Paying off the mortgage as quickly as possible, and then accumulating savings, is the best course of action for an individual. If there is to be compulsion, it should not start until indivuduals have had a good chance to get the mortgage under control - then they should save hard. Maybe an increasing scale of required contributions from somewhere in the 40s? Some contribution free income threshold would also be appropriate, to alleviate financial strain for those who can not afford to save.
The HorizonPoll survey covered a representative sample of the New Zealand population aged 18+.
It found 52% of respondents said that they were KiwiSaver members, up from 50% in December 2011. This reflects the growth evident in KiwiSaver membership from official statistics.
Graeme Colman
Principal
Horizon Research