CTU MEDIA RELEASE
15 August 2007

Historic KiwiSaver huge boost for workers’ incomes in retirement

“KiwiSaver is an historic watershed and the enhancements in this year’s Budget will mean a huge boost for the income levels of workers in retirement,” Council of Trade Unions president Ross Wilson told a select committee this morning.”

The CTU submission presented this morning suggests some improvements, with a key union concern being the minimum worker contribution rate, Ross Wilson said.

“Many workers will struggle to save 4% of their gross pay. A number of employers are agreeing to 2+2 deals (2% from both the employer and worker) which reflects the fact that it is easier for workers to come on board at that level of contribution".

“Our preference is to move to a situation where there is only a compulsory employer contribution and no requirement for a worker contribution, or for workers to be able to phase in at 1%, 2%, 3% and 4% as employers can.”

“At least, the transitional provisions that allow a worker to make a 2% contribution matched by the employer, and for that arrangement to stay in place until 1st April 2010, should continue beyond 1st April next year.”

“The up to $20 direct credit from Government and employers to workers for their savings makes it really worthwhile to sign up to a scheme. To retain the value of this, we are also calling for the $20 figure to be adjusted annually to take account of inflation and wage adjustments.”

“The exclusion of 16 and 17 year old workers from automatic enrolment and the benefits that accrue in the form of tax credits is discriminatory, and this also needs changing.”

ENDS

Download the submission here: www.union.org.nz/policy/KiwiSaver-July2007-submission