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Thread: Kiwi Saver - what's in it for employers?

  1. #1
    spid54 is offline Junior Member
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    Sep 2009
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    Default Kiwi Saver - what's in it for employers?

    Hi everyone. I have just changed jobs. My new employer appears to be steering me to opt out and it got me thinking. If they have to match my contributions, then it would be in their interest to encourage me to opt out and save some money. I am assuming that their contributions are not part of my salary package and are separate from wage negotiations.
    What's it it for them? What does an employer get out of Kiwi Saver?
    Is Kiwi Saver just something foisted upon industry and an extra burden that they must just absorb into their operating costs.
    Do they factor into their offer of employment that you will be opting in, and so encouraging you to opt out saves them money?
    Or am I listening to too many conspiracy theories?

    I know that it's the law and that they have to comply with it.
    I realise that you can't give financial advice on this forum, I am just asking for your own personal opinions.
    Oh yes here's another thing. I am 56 years old. Is it worth me joining KS? I have had RA's before and understand how they work.
    I get the general feeling from people that I speak to, that they are not happy with KS and are disappointed with the whole thing.
    Thanks a lot for your responses.

  2. #2
    Taffy's Avatar
    Taffy is offline He who shall be ignored
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    Default

    You're right, there's nothing in it for employers. They can claim back a proportion of their contributions but that's about it.

    I think the main beef people are having with KS is that if you don't opt out, you're stuck with it for several years. There's no way out once you start contributions, so if you hit an expensive patch it can hurt losing 4% of your pay. Of course, the other side to it is enforced savings, so if you're pretty bad at saving for retirement then it's a good option to avoid struggling in later life.

    Whether it's any good for you or not depends on your circumstances. I guess if you wont miss the 4%, then it's a good nestegg. If you're good at savings and investment though, then there's a good chance you'll be better off not going with KS.
    Taffy

    The greatest mistake you can make in life is to be continually fearing you will make one.

  3. #3
    spid54 is offline Junior Member
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    Default

    Hi Taffy. Thanks for yor reply.
    I kind of think that if the employer is going to contribute an equal amount, then even if the administrators of the investment are complete idiots, I would still come out with more than if I just invested an equivalent amount privately. Assuming that I invest in the same vehicle that is. Putting it into a conservative fund would hopefully leave little room for the managers to loose money on it.
    Sounds a bit like free money from my employer. So I would be silly not to take it because I assume that he has budgeted for this and probably (secretly) reduced my wages accordingly.
    I guess that a lot depends upon whether the KS approved investment vehicles are well run, and whether or not I could find a better one outside of KS. Even then it would have to be pretty good to match the employer contributions.
    I take your point about the difficulty of getting out once you are in, but it's not impossible to get out...or is it?

    Maybe it would be better to put the 4% into my mortgage. I don't actually have one yet, but want to buy a house at some point.

    We are relatively new in the country and will be cashing in our RA's back in SA, and so will have no retirement investments here. The plan is to have a house that is worth a fair amount from which we can downscale, and use the liberated money to fund our retirement along with the NZ Super.

  4. #4
    Justy is offline Junior Member
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    Default Kiwisaver

    I have been doing a lot of research for a book. Its a very political and economic work and i do not trust putting money into Kiwisaver one little bit. I have opted out but i was pressured not to. I basically had to tell them "No contract, no offer, no agreement, no acceptance". These are the basics of contract law. I was very firm and they backed off.
    My Kiwisaver would have been managed by ING which is a subsidiary of the Rothschilds Inter-Alpha Group of banks and financial institutions. This is no conspiracy theory. I have done the research. I want nothing to do with these banking groups because their history and intent is very questionable (lets just leave it at that).
    In Argentina the Government actually took private pensions from its citizens and used them to bail out banks. John Key is an ex investment banker who worked for Merrill Lynch, who in turn were wrapped up with the Enron scandal some years back.
    You can guarantee that one way or another, you will not get what you expect out of it. Why would they offer incentives such as $1000 start up amounts. Its a scam in my opinion. Inflation, new legislation, bad investing (often purposely) will errode it to the point where you would have been better off keeping your hard earned money for your own benefit in the here and now.

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