PSA Welcomes Compulsory Employer Contributions
May 17, 2007
PSA Welcomes Compulsory Employer Contributions To KiwiSaver
The PSA welcomes The Budget announcement of the enhanced Kiwi Saver Scheme.
“The enhanced KiwiSaver scheme provides a real benefit for PSA members working for organisations that do not have retirement savings schemes,” says PSA National Secretary, Richard Wagstaff.
“The compulsory employer contributions and the $1000 kick start payment, will encourage these workers to join the scheme and provide a real boost to their retirement savings.”
Richard Wagstaff says PSA members in the wider state sector may be disappointed that the State Sector Retirement Savings Scheme, (SSRSS) that covers staff working in the core public service, has not been extended to them.
Public servants covered by the SSRSS receive contributions to their retirement savings from their employers ranging from 1.5% to 3% of their gross base salary. The employer contribution under KiwiSaver begins on April 1 next year. It starts at 1% and increases to 4% from April 1, 2011.
"The SSRSS would have provided the wider state sector staff a higher initial employer contribution at an earlier date,” says Richard Wagstaff.
“But PSA members in the wider state sector, as well as those in community services and local government, who join KiwiSaver, will receive a $1,000 kickstart payment and tax credits of up to $20 a week from July and the employer contributions will rise to 4%".
“The PSA will also look to speed up the introduction of the higher levels of employer contribution, provided in the KiwiSaver scheme, when it negotiates to renew collective employment agreements covering members in the wider state sector, community services and local government.”
Richard Wagstaff says the PSA will also be working hard to raise the pay rates of its low paid members to make it easier for them to join Kiwisaver.