KEY POINTS:
Unions, lawyers and employers all predict difficulties with employment contracts under the KiwiSaver scheme, starting on July 1.
Council of Trade Unions economist Peter Conway said one of the main issues of concern was the 4 per cent entry level contribution, which could be a tough ask for
low wage earners.
He said a 2 per cent entry level for low wage employees with a matching payment from employers was a preferred option.
It was an issue the union would raise before a final bill on the scheme was passed, he said.
Simpson Grierson law partner and superannuation specialist Neil Cameron said the traditional "total remuneration" concept was a sticking point with KiwiSaver.
He said some employers traditionally approached employees from a total remuneration package point of view, where a salary was made up of pay, and allowances for extras such as vehicles.
The KiwiSaver concept of gross salary wages was one that didn't sit well with that concept, he said.
Contract arrangements were also likely to be complicated by the fact some employees would join the KiwiSaver scheme and others would not.
The situation was in some cases likely to present difficulties when it came to wage rounds.
"In that case you've taken it into account in the wage round but you aren't actually paying it because half your employees haven't joined up," he said.
Mr Cameron said there would be some initial confusion as people tried to word employment contracts to "do all sorts of gymnastics" but believed the issues would eventually sort themselves out.
Business NZ chief executive Phil O'Reilly said after the budget the scheme's voluntary nature would cause difficulties.
He said people could opt into KiwiSaver after initially negotiating a salary without it.
If a person who did choose to opt in later agreed to have their wages reduced by the amount of employer contribution unions could argue this was "contracting out" under the law and take the employer to court.
Mr O'Reilly said wage bargaining would become very complex with some opting into the scheme and others not.
But Mr Conway said he was not convinced the scheme would lead to bargaining complications.
"It's hard to see that because really for anyone on $52,000 or below, the first couple of years of contributions are completely covered by the government."
While employers would not be fully subsidised a few years down the track or when it came to contributing to high wage earners, the subsidies for employers were still significant.
"So I don't really see that there has to be a negative impact on bargaining, there could be a positive one, but I can't see a negative one."
He said it appeared most employees were getting more and more positive about KiwiSaver but that it was important they knew all the facts and individual options before joining.
"At this stage the focus is to get as much information as possible in front of workers for them to make their own minds up."
Treasury has predicted there will only be an initial take-up of 20 per cent of workers signing to KiwiSaver, rising to 50 per cent over 10 years.
- NZPA
