Consulting on retirement savings and bankruptcy
Hon Paul Goldsmith
Minister of Commerce and Consumer
Affairs
28 July 2016 Media Statement
Consulting on retirement savings and bankruptcy
Commerce and Consumer Affairs Minister Paul Goldsmith is encouraging people to have their say on retirement savings and bankruptcy.
“Bankrupt persons’ retirement savings are currently given uneven treatment, meaning some bankrupts’ retirement savings are released to repay creditors while other bankrupts are allowed to retain their retirement savings,” says Mr Goldsmith.
“I am releasing a discussion document looking at how retirement savings are treated during bankruptcy. I am seeking a policy solution that can be evenly applied across all retirement savings schemes including KiwiSaver.
“Insolvency policy and retirement savings policy have conflicting goals.
Insolvency policy aims to utilise the value of all available assets so creditors are repaid during bankruptcy, while retirement savings policy encourages people to accumulate assets to fund their retirement.”
“The discussion document puts forward three options to create a clear and consistent policy for how we treat retirement savings.
The options include:
1. Retirement savings except for
Crown contributions would be used to repay
creditors.
2. Personal contributions to retirement savings would be used to repay creditors; and employer and Crown contributions would be retained by the bankrupt.
3. A set percentage of retirement savings would be used to repay creditors and a percentage would be retained by the bankrupt, regardless of whether personal, employer or Crown contributions.
“The options have been worked up in order to start a discussion, and I welcome all feedback – including alternative options. Submissions will be looked at by the Ministry of Business, Innovation and Employment which will then put forward a proposal to me before final decisions later in the year,” says Mr Goldsmith.
To
find out more and contribute feedback, go to www.mbie.govt.nz/mbie/info-services/business/business-law/retirement-savings-in-bankruptcy
The
consultation period will run for two months from Thursday 28
July 2016 to Friday 30 September 2016
ends