KEY POINTS:
It is being reported that thousands of employees and employers do not have information about the KiwiSaver superannuation scheme, one working day before the scheme comes into force on Sunday.
Applications from four would-be KiwiSaver providers are still being processed by the Government Actuary, an electronic interface between
providers and the Inland Revenue Department is not ready, and budgeting agencies say they cannot cope with calls being diverted to them by the department's call centre.
Are you ready? Here is a selection of Your Views:
P. Altena
Before entering Kiwisaver I need facts I can't find. How are fees calculated, including mortgage diversion? What penalties and fees are there, especially if changing providers? Do they use a "hedge fund", what happens to it and what are my rights to that money? Do they subcontract to other investment companies and what do they charge? Where do they invest? If they use unit pricing, how do I know what my money is doing? What are my rights if the rules or fees are changed over 30 years? What percentage of interest do I end up getting in my hand? These questions need answering from contracts, not pamphlets, interest earning guesses or opinion pieces. I will not make half educated guesses and be trapped.
Nick Cowling
I have just read the Kiwi Saver documents. I note with grave concern that your savings are controlled by private companies and 'is not guaranteed by the government.' Is Michael Cullen a complete moron?! He demands we join KiwiSaver, but won't guarantee the investment.
That is one very very very big reason why I will never join KiwiSaver, and if asked will tell others to stay away. Anything the government wants you to do but won't stand by it 100 per cent has to be a crock!
Employer (Wellington)
We have yet to receive anything at all about KiwiSaver and are unable to answer the questions employees are asking. Two employees started yesterday and are upset to see that they are going to have deductions taken out or their first paypacket when another employee who started last week does not have to have deductions taken out unless he chooses to. The new employees are unable to opt out until they have been here 2 weeks. This does not seem fair.
Kiwi Financial Adviser (Sydney)
It's great that a proper savings scheme is now in place but it doesn't go far enough. There should be significant tax advantages in placing the money into the KiwiSaver scheme. Here in Australia you can "salary sacrifice' into superannuation and the money you salary sacrifice has the effect of reducing your taxable income. Instead it is taxed at a flat rate of 15 per cent in the superannuation environment a saving of 16.5 cents in each dollar if you earn between $25k - $75k and a saving of 26.5 cents in each dollar if you earn between $75k - $150k. In other words you're silly if you don't save through superannuatin here. Not only that, share dividends are taxed at 15 per cent and capital gains tax is 10 per cent inside the superannuation environment. So much better than having the income added to your marginal tax rate and employers pay a compulsory 9 per cent into superannuation. I just hope KiwiSaver is a small step for Kiwis to start saving.
Right now there is too much superannuation money in Australia and a lot of this has to be diverted offshore, New Zealand has been a popular destination for this money, and I believe Kiwis should have more control over kiwi co.s. Come on kiwis start saving.
Sweetpea (North Shore)
Which of the default schemes (or other schemes for that matter) offer mortgage diversion? That is where I would be able to divert half my contributions into my mortgage payment one year after joining? That is one question about KiwiSaver that hasn't been answered in any of the articles I have seen to date. I will not consider signing up until I know the ins and outs of that.
WendyG
So we take up the scheme and we save 4 per cent (in due course) of our earnings. What if the company we work for can't then afford to match our 4 per cent input of the KiwiSave plus a payrise based on inflation at say 3 per cent? It doesn't take a monkey to work out that employees will be given no pay rises if they take up the scheme! So while we save we don't get the increase in earnings. And what will $600,000 buy us at age 65 if we are 20 now? Where is this government coming from?
Stu (Auckland)
To all those with comments relating to the fund not being there on retirement, due to a future government taking it like Muldoon did, I'd like to point out the glaring fact that IRD are a conduit for the funds to a private insurer. I guess you just felt a pressing need to sound clever on a forum by bagging somebody else and grizzling about anything.
Employer
Last week I received 4 pamphlets for my 8 employees. My employees appear to be confused about what they will do, unable to decide due to the wealth of conflicting opinion about the schemes merits.
Steve (Wellington)
At this stage I think I will be joining KiwiSaver - but not until after the next election. All manner of multi billion dollar bribes (with our money) are going to go down then. I think the biggest bribe next time will be a change in tax brackets and then some of us might be able to afford the 4 per cent! In the meantime it's a waiting game for me. I also add that my stance is an indictment on NZ at the moment - we need to break out of the 3-year election cycle and think long term.
Geff
"How is this compulsory savings scheme any different from the super schemes of bygone days? Way back under the Muldoon government, I was enrolled in a super scheme which was supposed to be added to by the government. I saved approximately 20 per cent of my wages each week into this scheme and lost the whole lot with uncle Rob's think big scheme. Now I am being asked to risk my cash under a Labour government."
Someone wrote the above statement. It's got me thinking what will happen if the next government scraps the whole thing or if ten years down the track it goes belly up? Can we trust the govt with our savings?
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