Over 65s should receive KiwiSaver employer contributions
21 May 2019
Chair of the Summer KiwiSaver Investment Committee Martin Hawes has urged the Government to change the law so that employers are required to continue to make KiwiSaver contributions to workers over 65 years old.
Mr Hawes made this call as Deputy Prime Minister Winston Peters has said the Government is considering such changes.
Currently, employers are not required to match contributions for KiwiSavers over 65. Many people continue to work beyond that age but sometimes, when employers do not match KiwiSaver contributions, they effectively earn less for the same work, Mr Hawes said.
“Retirement is changing,” he said. “There is a no longer a bright line which demarks work from retirement – people often work well past 65 and there is no logical reason for them to take a pay cut simply because they achieve a particular birthday.
“The law today says that someone aged 65 plus one day can be paid less than those aged 64 and 364 days when employer KiwiSaver contributions are taken into account.”
Mr Hawes said the law on this is poor and reflects outdated views on the nature of modern retirement.
“There are fewer and fewer people who simply stop work on their 65th birthday. Many people, and in time probably most people, reduce their workload in their mid-sixties but continue in paid employment long after their 65th birthday. They should continue with the same employment arrangements and compensation.
“The current law is discriminatory in that it reduces pay purely on the basis of an arbitrary birthday.”
Mr Hawes applauded the Government for enabling over 65s to join or re-join a KiwiSaver scheme. “But the Government needs to take the next logical step and require employers to continue to make contributions,” he said.
Martin Hawes is the Chair of the Summer Investment Committee. The Summer KiwiSaver Scheme is managed by Forsyth Barr Investment Management Ltd and a Product Disclosure statement is available on request. Martin is an Authorised Financial Adviser and a Disclosure Statements is available on request and free of charge at www.martinhawes.com. This statement is general in nature and not personalised advice.