AXA CEO Sounds Warning For Workers' Savings
AXA CEO SOUNDS WARNING FOR WORKERS' SAVINGS
New Zealand workers are at serious risk of losing access to workplace superannuation warns Ross McEwan, Chief Executive of AXA New Zealand.
In an address to members of Association of Superannuation Funds of New Zealand (ASFONZ) in Auckland and Wellington this week, Mr McEwan raised concern at the dramatic fall in the number of company superannuation schemes in New Zealand as many firms downsize, contract out, move offshore or lose interest in superannuation.
Mr McEwan said it was discouraging to see employers sidelined from the superannuation market. With 90% of New Zealand business now employing less than ten people, only 17% of these employees have any workplace superannuation.
"Superannuation is simply not a major priority for small employers and, as long as that remains the case, our market will not grow."
Mr McEwan indicated that, while most employers are genuinely concerned about their employees' retirement savings, they often face barriers in the form of government action. "If it hadn't been for increased costs, tax anomalies and compliance burdens imposed by successive governments, we would not now be in this environment of decline," he said.
However, Mr McEwan maintained that superannuation providers could no longer afford to wait for the government to get it right. He urged members of the industry and associations such as ASFONZ to assert their leadership role in actively addressing changing clients needs and promoting the logic of workplace savings among small employers. "No-one can deny that it will always be easier to deduct savings at source, rather than to prise the money out of investors' hands, " he added.
In particular, in response to recent changes in the employment relations environment, he welcomed that opportunity to work more closely with unions in offering superannuation benefits to union members.
He also suggested that the industry should be more active in providing financial advice and education at the workplace. With the economy currently experiencing strong growth, the workplace was the ideal point of focus in helping to increase the national savings rate.
In terms of the superannuation industry itself, Mr McEwan indicated that significant changes lay ahead in the face of growing competition for workplace superannuation savings. The likely result would be a wider range of innovative products and distributors and further alliances and mergers with some companies choosing to quit the industry altogether.