Women in Super Supports Workplace Savings
Monday, 23 May 2005
Women in Super Supports Workplace Savings Initiatives
Women in Super (WIS) welcomes the Government's KiwiSaver initiative announced in last week’s budget and looks forward to working through the detail to ensure womens’ interests and specific needs are catered for.
Tracey Cross, Chair of Women in Super and a Senior Associate at the trans-Tasman commercial law firm, Phillips Fox, says WIS is particularly encouraged to see the focus on building financial literacy through a funded education programme. However, Ms Cross says it is important that such a programme is readily available to all New Zealanders and not just to those currently in the workplace.
WIS is particularly encouraged to see the following points in the detail currently available, which are of particular relevance and benefit to women:
a savings scheme available to all permanent employees, which includes those in part-time employment, of which women form a large percentage;
the ability for the self-employed and beneficiaries to opt into the scheme;
the ability to take a contribution holiday;
deduction at source (the most efficient form of savings); and
the $1000 kick-start incentive.
“While WIS is pleased to see the availability of withdrawals for hardship and home ownership deposits, we strongly suggest the focus should be on long-term retirement savings,” says Ms Cross. “With a minimum contribution rate of 4%, or optional increased rate of 8%, WIS also feels the proposed contribution rates may be onerous for many women, insufficiently flexible to accommodate women’s changing circumstances and lower income levels and may be a barrier to many women contributing to such a scheme. In WIS's opinion, consideration should be given to a tiered contribution rate, similar to that implemented by the State Sector Retirement Savings Scheme.”
Ms Cross said WIS was pleased to see the removal of tax on gains on domestic investments in CIV's and supports the taxing of income at individual marginal rates. She says many women are currently disadvantaged by the application in superannuation schemes of a flat tax rate of 33%.