Gordon Campbell | Parliament TV | Parliament Today | Video | Questions Of the Day | Search

 


State sector retirement scheme providers announced

16 February 2004 Media Statement

State sector retirement scheme providers announced

AMP Financial Services (NZ) Ltd (AMP), ASB Group Investments Limited (ASB), AXA New Zealand (AXA) and Global Retirement Trust (GRT) have been selected as the providers for a new retirement savings scheme for employees in the state sector, State Services Minister Trevor Mallard announced today.

An independent selection panel selected the four companies following a competitive tendering process.

Trevor Mallard says up to 100,000 state sector workers will be able to save for their retirement through the new scheme, which will be running from July 2004.

Employees joining the scheme can choose their own level of contribution, and the government will match that up to a maximum of 1.5 per cent of salary in the first year and 3 per cent from the second year.

"It is important that the state sector sets a good example in encouraging retirement savings. This scheme will help many people to better prepare for their retirement.

"This government is also committed to building strong public services which fully meet the needs of all New Zealanders, regardless of their background. To do this, it's important we recruit and retain good people, and this scheme is a great incentive.

"The public service, as a collection of departments and organisations, is one of the country's largest employers. The new superannuation scheme will be portable between departments as people progress their career.

"The scheme has been designed to offer its members lots of choice. This includes choice of brand, organisation type, administration manager, investment fund, investment style, risk profile, and fee structures, together with a range of additional products such as life and other insurances," Trevor Mallard said.

The scheme will be available to state sector employees in government departments, employees in the education sector (including support staff) whose conditions are negotiated by the Ministry of Education on behalf of the State Services Commissioner, if they are not part of an existing employer-subsidised scheme.

The scheme has been established in accordance with the "Partnership for Quality' agreement between the government and the Public Service Association (PSA). It arose out of the Tripartite Forum (involving the Minister of State Services, the PSA, the State Services Commissioner and public service chief executives) and the primary teachers' scheme negotiated with NZEI, and involved negotiations between officials, the government and the Council of Trade Unions.

The State Services Commission will now manage the implementation of the scheme in the state sector, in partnership with the four providers, the Treasury, the PSA and other state sector unions.

State Sector Superannuation scheme

Questions and Answers

When will the scheme be operational?

From July 2004.

Who is eligible?

The scheme will apply to employees of government departments and entities for which the State Services Commissioner has statutory responsibility for negotiating collective agreements. About 100,000 employees are eligible.

These include:

- the 35 public service departments;

- the six non-public service departments (Defence Force, SIS, Office of the Clerk, Parliamentary Services, Police, Parliamentary Counsel Office);

- the state school sector (including support staff); and

- registered teachers employed by free kindergarten associations.

Those employees who already receive employer contributions greater than the maximum (as stated for this scheme) will not be entitled to additional employer contributions.

How can staff apply?

Application material and supporting information will be sent to all qualifying state sector organisations for circulation to staff during April and May.

How will contributions to the scheme work?

Employees will be able to choose their desired level of regular contributions, paid directly from their salary. Employers will match these contributions up to a maximum of:

1.5 per cent of gross salary in year 1; and

3 per cent of gross salary from year 2.

The employer contributions will be in addition to total remuneration, and not exchangeable for cash or other benefits.

Employer contributions for the existing primary school teachers' scheme will increase to 3 per cent in 2004, then pause to align with the new scheme.

When will the benefits be payable?

Full benefits will be payable:

- At the age of entitlement to NZ Super (currently 65), whether or not retiring.

- Ten years prior to the age of entitlement to NZ Super (currently 55), upon retiring.

- At age 50, upon resigning from State sector employment.

- Upon death, to the employee's estate.

Employees will be able to apply to withdraw funds early in the event of significant financial hardship.

Who will be the retirement savings scheme providers?

Employees will be able to choose from four Master Trust providers who will offer a range of investment funds and styles. These are AMP Financial Services (NZ) Ltd (AMP), ASB Group Investments Limited (ASB), AXA New Zealand (AXA) and Global Retirement Trust (GRT).

Why four Master Trust Providers?

The government is keen to offer state sector employees a wide range of choice in saving for their retirement. Four providers will offer choice through:

- Four different organisations with well known and respected brands.

- Three different types of organisations - a bank, a specialist superannuation trust, and two financial services companies.

- A wide range of investment funds.

- Different investment styles.

- Different risk/return options.

- Different fee structures.

- Different add-on products such as life and other insurances.

What are the other features of the retirement savings scheme?

- The scheme will be voluntary for employees.

- It is not linked to length of service so new employees will be eligible.

- It will be a defined contribution scheme.

- It will be portable and transferable.

- Funds will be locked-in for retirement.

- Administrative costs and fees will generally be paid for out of contributions. However, this will be subject to the terms of any existing arrangements, and any future negotiations within individual agencies.

- Employer contributions will vest immediately to the employee's account.

All contributions (other than employees' "voluntary" contributions) will be locked-in until retirement.

- Employer contributions will be back-dated to 1 April 2004, subject to them being matched by employee contributions.

How will the employer contributions be funded?

Employer contributions will be funded from "new money' held in Vote State Services. This "new money' will cover employer contributions to the stated maximums. If individual agencies negotiate to pay higher contributions or administrative costs, this will be funded directly from agency baselines.

What is the cost of the scheme?

The total cost of the scheme will depend largely on the uptake.

Is this scheme a first?

The previous superannuation scheme for government employees (the GSF) closed to new members in 1992. This scheme is therefore the first major initiative across the whole of government in 11 years. However some individual departments have initiated their own schemes and arrangements, some of which will be integrated into this new scheme.


© Scoop Media

 
 
 
 
 
Parliament Headlines | Politics Headlines | Regional Headlines

 

Ruataniwha: DOC, Hawke's Bay Council Developer Take Supreme Court Appeal

The Department of Conservation and Hawke's Bay Regional Investment Company (HBRIC) are appealing to the Supreme Court over a conservation land swap which the Court of Appeal halted. More>>

ALSO:

With NZ's Marama Davidson: Women’s Flotilla Leaves Sicily – Heading For Gaza

Women representing 13 countries spanning five continents began their journey yesterday on Zaytouna-Oliva to the shores of Gaza, which has been under blockade since 2007. On board are a Nobel Peace Laureate, three parliamentarians, a decorated US diplomat, journalists, an Olympic athlete, and a physician. A list of the women with their background can be found here. More>>

Gordon Campbell: On The Key Style Of Crisis Management

At Monday’s post Cabinet press conference Key was in his finest wide- eyed “Problem? What problem?” mode. No, there wasn’t really a problem that top MPI officials had been at odds with each other over the meaning of the fisheries policy and how that policy should be pursued... More>>

ALSO:

Mt Roskill: Greens Will Not Stand In Likely Post-Goff By-Election

“The Green Party’s priority is changing the Government in 2017, and as part of that we’ve decided that we won’t stand a candidate in the probable Mt Roskill by-election... This decision shows the Memorandum of Understanding between Labour and the Green Party is working." More>>

ALSO:

Wellington: Predator Free Capital Plan

Wellington City Council (WCC), the Greater Wellington Regional Council (GWRC) and NEXT Foundation, today announced a joint collaboration to make Wellington the first Predator Free capital city in the world. More>>

ALSO:

Gordon Campbell: On Judith Collins’ Efforts At Self Correction

Thousands of prisoners currently in prison may be entitled to an earlier release than expected – and compensation – because Corrections has incorrectly calculated their term of imprisonment. Unless of course, the government buries its mistakes by changing the law and retro-actively getting itself off the hook… More>>

ALSO:

More Justice & Corrections

Sector Opposes Bill: Local Government Bill Timeframe Extended

The Minister of Local Government Peseta Sam Lotu-Iiga has asked the Select Committee to extend the report back date for the Local Government Act 2002 Amendment Bill (No 2). More>>

ALSO:

Get More From Scoop

 

LATEST HEADLINES

 
 
 
 
 
 
 
 
 
Parliament
Search Scoop  
 
 
Powered by Vodafone
NZ independent news