KiwiSaver closes in on 2 million members

KiwiSaver membership hit just short of 1.97 million by the end of June.

A default provider in the scheme, Tower Investments, has crunched the numbers on enrolment statistics held by the IRD for the month of June.

At just over 16,500 new members, the growth rate was somewhat sluggish.

But Tower Investments chief executive Sam Stubbs says it was a month characterised by intensifying public and political debate over the merits of making KiwiSaver membership compulsory for working New Zealanders.

“With the average monthly growth rate in membership much lower so far over 2012 than was seen the year before, it appears most of those workers who would voluntarily embrace KiwiSaver have already done so.

“The question arises as to whether the remainder of working New Zealanders who are not KiwiSaver members should be required to sign up.”

Tower’s analysis reveals at the end of June, 65% (1,278,680) of KiwiSaver members were active members, who joined the scheme by choice.

And 25.6% (503,723) were in government-assigned default schemes.

Mr Stubbs says Tower supports compulsory workplace superannuation.

“Whether or not funding of New Zealand Superannuation in its present form remains affordable over future decades is really beside the point,” he says.

“Compulsory KiwiSaver membership could go a long way to insuring New Zealanders against post-retirement risk, which is the risk associated with exposure to unanticipated costs and expenses or lower income once working life has ended.

“Moreover, compulsory KiwiSaver could be of huge assistance for building up the stock of domestic capital that New Zealand is going to need if it is to wean itself off from over-reliance on foreign capital.”

While New Zealanders debate the prospect of selling down public ownership of some state-owned enterprises, Mr Stubbs says it should be remembered KiwiSaver schemes would be steadily accumulating and stockpiling long-term investors in these businesses, helping keep ownership and control of the private sector float of the shares here.