Retirement income review hits nail on head
The 2019 Review of Retirement Income Policies by the Commission for Financial Capability hits the nail on the head around KiwiSaver and NZ Superannuation, says Financial Advice NZ.
“This review tells it exactly like it is and the Government must listen,” says Chief Executive Katrina Shanks.
“Planning for retirement and income in retirement is one of the most pressing issues Kiwis are facing as their ability to own their own house goes further out of reach and in the face of the changing jobs market.
“This report’s recommendations are the bold moves that are needed to give more people more certainty.
“Anything that enhances KiwiSaver and encourages people to plan and save for their retirement is a good thing, and we support everything the report recommends.
“We particularly welcome the calls to:
introduce a ‘Small Steps’ employee contribution
programme as the default for new members and as an option
for current employees
exclude fixed fees for low-balance (under $5000) accounts, display fee projections and comparisons on annual statements
make Prescribed Investor Rates tax refundable
phase in employer contributions for members over 65 years of age, and auto-enrol beneficiaries
target the government contribution to incentivise voluntary contributions by non-employees.
“Any of these by themselves would encourage participation, but collectively they would be a game-changer in the way Kiwis from all walks of life are saving for retirement.
“In addition we believe the other game-changer initiative would be allowing New Zealanders to access professional financial advice in the workplace, particularly when you enter your first job.
“We agree NZ Superannuation should remain on current settings, particularly in light of Treasury projections that show it’s sustainable for at least the next 30 years, and that raising the age would do more harm than good.
“We also fully support the Commission for Financial Capability in its call for more work to be done across government to help people prepare for retirement, especially giving it more resources to lead that.
“Financial Advice NZ will continue to play its part in helping ensure Kiwis have access to quality advice to increase their financial health, wealth and wellbeing.”