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No rush for SOP for Kiwisaver; more fixes needed

Wednesday, December 13th, 2006

No rush for SOP for Kiwisaver; more fixes needed

Extending the tax breaks in KiwiSaver to existing super schemes operated by employers was sensible and had to happen, the Employers & Manufacturers Association (Northern) says.

But there is no need to rush through a Supplementary Order Paper to include the provision because other KiwiSaver issues also need fixing.

"We raised the matter of extending the KiwiSaver tax advantages to existing company super schemes with Dr Cullen and we're pleased this is to be done," said Alasdair Thompson, EMA's chief executive.

"If it wasn't attended to, large organizations such as health boards with thousands of employees would be detrimentally affected.

"To join however all super schemes will have to have their trust deeds amended.

"Of equal concern to employers and still outstanding is the treatment of casual employees under the scheme.

"KiwiSaver was designed as though it could be applied to casual workers but an error was made in assuming that casuals have continuous employment service. The law has determined they do not.

"As well, tracking their employment record for KiwiSaver entitlements would be ridiculously difficult if not impossible.

"Revenue Minister Peter Dunne has advised us the issue is to be fixed but not until next May, just days before employers have to implement the scheme. They need much earlier clarification.

"We also fail to understand why people over 65 don't qualify to join KiwiSaver, which seems to be discriminatory. They should be able to join for a minimum of five years, the same as for people under 65.

"People under 18 should be able to join too; it would be unjust to exclude them.

"We would like to see all of these KiwiSaver issues fixed at the same time early in the New Year."

ENDS

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