The Minister of Finance is dismissing calls to mandate employers to contribute to the KiwiSaver accounts of their over-65 workers.
It follows Westpac saying last week the Government should make it compulsory, and more employers should be doing it voluntarily in the meantime.
The Retirement Commission agreed, telling the Herald only 36% of the workforce over 65 got any contribution to their accounts from their work.
Advocacy group Age Concern spokeswoman Sarah Maxwell told the Herald: “It’s important there is equitable treatment in the workplace, irrespective of age.
“Older people have the right to age in comfort and dignity, with the option to retire with adequate income if that is their wish, or to continue working.”
Maxwell said many older people were in financial hardship, a key reason why more kept working.
Statistics New Zealand data showed 124,500 people between 65 and 69 were in full and part-time work at the end of 2023, up from 112,900 in 2020.
The number aged between 70 and 74 in work was 56,400, up from 54,900 in 2020. Employees over 75 numbered 32,900, up from 24,400 in 2020.
Unexpected life events were financial blows for some, reducing retirement savings they had banked, Maxwell said.
Many were still paying off mortgages, struggling with rising council rates, insurance costs, healthcare expenses and general living costs.
“It’s making it increasingly difficult for some to live on retirement income.”
Making employer contributions compulsory for over-65s would help support financial security for those still working, Maxwell said.
“The justification for stopping employer KiwiSaver contributions at age 65 is rooted in the original design of KiwiSaver as a pre-retirement savings scheme, with 65 as the assumed retirement age.
“However, with changing workforce demographics and financial realities, we would support a review of this policy.”
Dr Michelle Reyers, policy lead at the Retirement Commission, said NZ had one of the highest labour force participation rates for those over 65 in the Organisation for Economic Co-operation and Development (OECD).
NZ does not have an age at which people are required to retire, unlike some countries, a reason Reyers pointed to behind the high number of older workers.
There were some employers voluntarily contributing already, she said.
And while 36% of wage and salary earners over 65 received a contribution from their employer, only about 39% were making employee contributions.
That left 3% who were not getting matched contributions from their employer.
“Many more people may make their own contributions if employer matching was compulsory after age 65. In general, across other age groups where employer matching is compulsory, more than 80% of employees make a contribution.”
Nigel Jackson, Westpac NZ’s KiwiSaver Scheme chief executive, said employer contributions would make a meaningful difference to older people’s retirement savings.
“There is a fairness element. Workers over 65 doing the same work as younger workers should get the same benefits,” Jackson said.
However, Finance Minister Nicola Willis told the Herald “there is no need” to change KiwiSaver’s settings for workers over 65.
“Age 65 is when all the ‘lock-in’ provisions of KiwiSaver end and people can withdraw money at any time,” she said.
“At that stage there is no need for the other features of KiwiSaver – the government contribution and employer matching – to continue.
“Employers can choose to contribute to KiwiSaver for workers over 65, however, and the government will also be paying them NZ Superannuation,” Willis said.
Raphael Franks is an Auckland-based reporter who covers business, breaking news and local stories from Tāmaki Makaurau. He joined the Herald as a Te Rito cadet in 2022.
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