The Ministry of Business, Innovation and Employment (MBIE) have been asked by the Government to review KiwiSaver. The review includes a proposal to shift the focus of Government contributions to incentivise voluntary rather than standard employee contributions.
A number of key proposals are being considered:
Changing Government contributions to incentivise only KiwiSaver members making additional, voluntary contributions. Members only contributing the minimum 3% from earnings would not qualify for the Government contribution.
Defaulting new members into a ‘small steps’ programme to increase contributions automatically rising by 0.50% pf pre-tax income per year up to a 10% maximum contribution
Removing age bans from KiwiSaver to continue employer contributions past age 65
Ending ‘total remuneration’ type packages where KiwiSaver contributions are included within the salary package
‘Sidecar funds’ to create access to a separate fund of up to $3,000 for emergency purposes
These changes were some of those recommended from the 2019 review of retirement income policies by the Retirement Commissioner.
Recommendations from MBIE will be considered by the Government before any changes are confirmed.