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PSA welcomes state retirement savings scheme

Moves to widen state sector retirement savings scheme welcomed

The Public Service Association (PSA) is welcoming the government’s confirmation today that is looking to widen the State Sector Retirement Savings Scheme.

The PSA championed the establishment of the scheme, which began operating on 1 July this year, as a key measure to strengthen the public service and to provide a lead to private sector employers and workers about the importance of saving for retirement. The PSA has also consistently advocated widening the group of public sector employees covered by the scheme and increasing the employer contribution over time.

PSA National Secretary Richard Wagstaff said it is good to see the government laying the foundations for an expansion of the retirement savings scheme, but the union believes faster progress is needed.

“Public servants have embraced the State Sector Retirement Savings Scheme, with the number signing up in the first year considerably exceeding expectations. The scheme is also seen as a leading product by the retirement savings industry.

“We know from our contact with members that there is real disappointment that workers employed outside of the core public service were not included in the original scheme. The general public does not draw an arbitrary line between district health board workers or Housing New Zealand staff with other public servants working for the ministries of health and housing, neither should their superannuation scheme.

“We say all public servants should have access to the scheme. It is therefore disappointing that the working party being established to investigate extending the scheme will not report to government until June 2006. The PSA is also exploring options for providing employer subsidised schemes for our members in local government.

“We are pleased that a second working party has been set up to look at how to increase the employer subsidy beyond the 3 per cent of salary it will reach next July. The PSA supports the Superannuation Working Party recommendation of a 6 per cent employer subsidy, enabling workers to set aside 12 per cent of their gross salaries annually.

“The government’s moves to improve the superannuation scheme it provides for its workers comes at the same time as it is considering recommendations on how to encourage private savings in the private sector. Superannuation has been a political football for far too long and, while we applaud the government’s commitment to lead by example, we believe it needs to move much more quickly to ensure all its employees can begin saving for their retirement,” Richard Wagstaff said.

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