Business group wary of KiwiSaver auto-enrolment
Business NZ says government should think carefully before changes to KiwiSaver, including 'soft compulsion'.
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Business NZ has called for a time of "careful consideration" before any decisions are made on automatic enrolment for KiwiSaver.
The call comes in response to Prime Minister John Key saying the government is looking at options to increase enrolment in KiwiSaver, which has about 1.7 million members.
Options being considered include possible 'soft compulsion' where people in the workforce are automatically enrolled but still have the chance to opt out.
Business NZ chief executive Phil O’Reilly says employers are supportive of employee choice and the reasoning behind making enrolment automatic would have to be sound.
“It should be acknowledged that KiwiSaver might not be appropriate for all people in all circumstances.
“Another point to be addressed is KiwiSaver’s tendency to displace a certain amount of existing savings.
“These factors raise questions about the necessity of making KiwiSaver enrolment automatic at this stage.”
Mr O’Reilly says any moves in that direction should be transparent and employers should have the ability to contribute to the decisions.
“Any sudden change to the scheme would have a significant impact on employers, and those with stretched wage budgets experiencing tight business conditions would find a sudden potential increase in co-funding costs hard to deal with.
“Compliance costs would also need to be carefully considered.”
Niko Kloeten
Thu, 04 Aug 2011
Thu, 04 Aug 2011
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Business group wary of KiwiSaver auto-enrolment
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