Tower Supportive Of Cullen's Super Proposal
TOWER SUPPORTIVE OF CULLEN'S SUPER PROPOSAL
Tower Investment Savings Managing Director, Mr Stuart Fish, has come out in full support of the Government's moves to encourage superannuation savings for those earning over $60,000 per annum from 1 April this year. But he says the key is getting all the political parties in accord with this latest initiative. People are desperate for stability in their retirement planning and this move offers a chance for more certainty.
"The concept needs to be simple, and I believe Dr Cullen's philosophy behind the proposed income tax approach is to find an uncomplicated solution. Encouraging New Zealanders to use legitimate superannuation schemes in a tax advantaged way is a huge step forward.
"Although details are still to be decided, we are encouraged to hear that people on lower incomes will also be considered within the framework of the superannuation policy. Dr Cullen has indicated that people earning less than $38,000 could pay lower tax on their work scheme superannuation savings. At present these earners are paying 33% on their long-term (retirement) savings versus a tax rate of 15 or 20% on their earnings.
There are also suggestions that employers may be able to pay into personal superannuation schemes on behalf of employees. TOWER would strongly support this move as too few companies offer group based schemes these days. There are also a growing number of self-employed people to consider.
"Over the past several years Tower has been closely involved with many of the moves to promote a more solid superannuation policy and equitable taxation foundation," said Mr Fish.
"As one of the largest financial services groups in New Zealand, Tower manages and/or provides trustee services for over 500 employer and group superannuation schemes, equivalent to a current market share of 31.5%. TOWER also manages several large retail (personal) superannuation funds," he said.
Mr Fish hopes that the proposed superannuation and taxation legislation receives support from other political parties.
"At long last a government in New Zealand has taken a definitive stand in encouraging savings for retirement. It would be even more successful if other parties were to come out in support of this legislation. At the very least, the proposed changes provide a framework for future improvements," said Mr Fish.