Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Infometrics On Potential Impacts of Kiwisaver - Key Points

For Immediate Release

Infometrics Report on the Current And Potential Impacts of Kiwisaver

Key Points from a report from Infometrics titled The Potential Impact of KiwiSaver on the New Zealand Capital Market, which was commissioned by the Financial Services Council (FSC) are:

• If KiwiSaver can achieve closer to universal coverage, say 80 percent of the workforce and contributions move up to 10 percent, (5 percent from employees and matched 5 percent by employers) the KiwiSaver fund would grow from its current level of $13 billion today to $731 billion by 2066.

• The impacts on the economy for New Zealand would be substantial and include investment in new jobs, an improvement in worker productivity and wage rates, slightly lower interest rates and a more resilient economy during recessions.

• Those starting work today would also get twice the pensions they would be entitled to currently from just NZ Super when they finish their working careers. They would look forward to a comfortable lifestyle, compared to those retiring today.

• To reach the $731 billion goal new KiwiSaver enrolees would need to increase their contributions by 1 percent a year to reach a total of 10 percent. This is an extra half percent a year each from themselves and their employer, over 10 years from 2015 to 2024.

• Existing KiwiSaver members whose contributions currently average 5 percent of income rising to a minimum of 6 percent this year, would only need to increase contributions by 1 percent a year for four years to achieve a 10 percent contribution rate for the rest of their working years and reach the $731 billion goal.

• The average KiwiSaver contribution at 5 percent is well below other countries and way short of what is needed to provide people starting work today with a comfortable retirement income for their expected longer retirement.

• Australian employers, who currently pay 9 percent, will move up to 12 percent over the balance of this decade.

• Two million New Zealanders and some 50 percent of the workforce are currently signed up to KiwiSaver.

• Existing KiwiSaver funds are already creating a significant boost for younger New Zealanders purchasing their first home. In 2012 KiwiSaver funded deposits on 10,000 first homes, worthy around $3 billion.

• Money is being invested into fast-growing New Zealand businesses and helping those businesses maintain a New Zealand base and ownership.

• KiwiSaver is creating a cushion against future economic downturns by ensuring capital continues to flow into companies because the contributions don’t stop being invested in response to short-term events, such as a share market downturn.

The Financial Services Council (FSC) has funded the research to stimulate further discussion. It will test New Zealanders appetite for a universal KiwiSaver Plus savings scheme with market research.

About the Financial Services Council

The Financial Services Council has 22 member companies and 17 associate members. Members are managing nearly $80 billion in savings and provide financial services to more than 2 million New Zealand investors and policyholders.

If you have a life insurance policy or a KiwiSaver account then there is a more than 80 percent chance it is managed by a Financial Services Council member. Last year the FSC report Pensions for the 21st Century: Retirement Security for Younger New Zealanders kicked off renewed debate about how to provide most New Zealanders with a comfortable retirement income when our longevity after 65 years is growing by two years every decade.

Full Infometrics Report:

The Potential Impact of KiwiSaver on the NZ Capital Market - Full Infometrics Report

ENDS

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

BusinessDesk: SkyCity Lifts Minimum Convention Centre Investment To $430M

SkyCity Entertainment Group, the casino operator, has lifted the minimum it will invest in the Auckland International Convention Centre to $430 million and said total costs including land may be $450 million to $470 million. More>>

Statistics: Drop In Dairy Prices Leads Fall In Exports

Total goods exports fell $240 million (5.5 percent) to $4.2 billion in April 2015 compared with April 2014, Statistics New Zealand said today. More>>

BusinessDesk: APN's NZME Sees Future In Paywalls, Growth In Digital Sales

APN News & Media has touted a single newsroom concept for its NZME unit in New Zealand, similar to what Germany's Die Welt uses, saying an 'integrated sales proposition' is helping it win market share, including ... More>>

Labour Party: Global Milk Prices Now Lowest In 6 Years

The latest fall in the global dairy price has brought it to the lowest level in six years and shows there must be meaningful action in tomorrow’s Budget to diversify the economy, says Labour’s Finance spokesperson Grant Robertson. “Dairy prices ... More>>

BusinessDesk: NZ Inflation Expectations Creep Higher In June Survey

May 19 (BusinessDesk) - New Zealand businesses lifted their expectations for inflation over the next two years, sapping any immediate pressure on the Reserve Bank to cut interest rates, and prompting the kiwi dollar to jump higher. More>>

BusinessDesk: Lower Fuel Costs Drive Down NZ Producer Input, Output Prices

May 19 - Producer input and output prices fell in the first quarter, mainly reflecting lower fuel costs and weakness in prices of meat and dairy products. More>>


Media: Fairfax Media NZ Announces Senior Editorial Team

Fairfax Media New Zealand has today confirmed its new editorial leadership team, as part of a transformation of its newsrooms aimed at enhancing local and national journalism across digital and print. More>>

Science: Flavonoids Reduce Cold And Cough Risk

Flavonoids reduce cold and cough risk Research from the University of Auckland shows eating flavonoids – found in green tea, apples, blueberries, cocoa, red wine and onions – can significantly reduce the risk of catching colds and coughs. The research, ... More>>

BusinessDesk: RBNZ House Alert Speech The Catalyst For Government Action

Prime Minister John Key all but conceded that pressure from the Reserve Bank of New Zealand for concerted action on rampant Auckland house prices was one of the main catalysts for the government's weekend announcements about tightly ... More>>

BusinessDesk: How To Fall Foul Of The New Housing Tax Rules: Tips From IRD

Just because you rented out your investment property doesn't absolve you from paying tax, says the Inland Revenue Department in a summary of commonly made mistakes by non-professional property investors when it comes to their tax liability.More>>

Legal: Superdiversity Law, Policy And Business Stocktake Announced

Mai Chen, Managing Partner at Chen Palmer New Zealand Public and Employment Law Specialists and Adjunct Professor of Law at the University of Auckland, today announced the establishment ... More>>

Housing: More House Price Gains Expected

House price expectations remain high, with a net 56% of respondents expecting house prices will increase. Fears of higher interest rates are fading, consistent with the RBNZ’s signals this year. Affordability and a lack of houses for ... More>>

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news