Latest / Early Edition with Ryan Bridge / Claire Matthews: Massey University banking expert says Kiwisaver election pledge doesn't go far enough

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Claire Matthews: Massey University banking expert says Kiwisaver election pledge doesn't go far enough · Early Edition with Ryan Bridge

• 0:00
  Speaker 1: Nationals dropped its first election promise it wants to lift
• 0:02
  Speaker 1: the default key we save a rate to twelve percent
• 0:05
  Speaker 1: by twenty thirty two to match the Aussies. Employer contributions
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  Speaker 1: were jumped to six percent, increasing by half a percent
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  Speaker 1: each year, but not until twenty twenty nine. Claire Matthews
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  Speaker 1: is Associate Professor, Massa University Business School. Claire, good morning, Good.
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  Speaker 2: Morning, Ryan, good thing. Well, yes and no, yes, it's
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  Speaker 2: good to see key we save rates rise, but to
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  Speaker 2: see it done in this way is not necessarily the
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  Speaker 2: best way.
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  Speaker 1: What's wrong with this way?
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  Speaker 2: It's a little bit piecemeal. We need to actually think
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  Speaker 2: about can we save it in bigger terms and think
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  Speaker 2: about actually, if we're going to make some changes, how
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  Speaker 2: do we want it to log And yes, one of
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  Speaker 2: those changes might be to the default rate, but that
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  Speaker 2: should be part of a bigger picture, not a single change.
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  Speaker 2: There are other changes that need to be made which
• 0:55
  Speaker 2: came out in the Retirement Commissioner's Report on the Review
• 0:59
  Speaker 2: of Retirement and come last week or the week before.
• 1:03
  Speaker 2: There's things like total remuneration contributions for over sixty five
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  Speaker 2: year olds. Those are just a couple of things, but
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  Speaker 2: it's looking at it in a bigger way. And the
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  Speaker 2: other issue is that if people think it's too high,
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  Speaker 2: because you're not compelled to be a member of key
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  Speaker 2: we save, but they'll just say or to continue to contribute,
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  Speaker 2: they'll just say I can't afford this, I'll put it
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  Speaker 2: off hold, and therefore then they're not contributing anything, which
• 1:28
  Speaker 2: is actually a worse situation.
• 1:29
  Speaker 1: It's basically, choose your own adventure. You can choose to
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  Speaker 1: be in it, it'll not be in it, and you can
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  Speaker 1: choose which rate you go with. So what the total
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  Speaker 1: remuneration issue has been raised with me before, so tell
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  Speaker 1: me how this works. An employer will say, yeah, we
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  Speaker 1: could do the at six percent rate and match your
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  Speaker 1: six percent rate, or we could give you the money
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  Speaker 1: now in hand.
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  Speaker 2: Basically that's how it works. Yes, so instead of putting
• 1:53
  Speaker 2: it into your KEII savior, they say, we'll give it
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  Speaker 2: to you, and then it's your responsibility to put it
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  Speaker 2: into your kiwisaver or put it somewhere else. But you're
• 2:00
  Speaker 2: not actually going to get it as an extra to
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  Speaker 2: your salary. It's put into your salary. There's fine for
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  Speaker 2: some very high earning employees are your chief executives and
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  Speaker 2: c suite people, But it's where it gets applied to everybody.
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  Speaker 2: And CEOs isn't like have a bit more power in
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  Speaker 2: terms of their relationship with their employer. But some employers
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  Speaker 2: do this to people who really have no power in
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  Speaker 2: their relationship and they've really got no choice but to
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  Speaker 2: go along with it, even though it's not in their
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  Speaker 2: best interest or what they want.
• 2:34
  Speaker 1: Does it not have the same in terms of financial outlay?
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  Speaker 1: Would it be no different for the employer whether they're
• 2:39
  Speaker 1: paying into a KYP saver or giving them to them upfront.
• 2:44
  Speaker 2: Fundamentally, it shouldn't cost any difference.
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  Speaker 1: Why would they do it?
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  Speaker 2: Because it just makes it a lot easier. Instead of
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  Speaker 2: having to worry about payments going here, there and everywhere,
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  Speaker 2: they just have to worry about what amount to pay?
• 2:56
  Speaker 1: Gotcha? Claim Matthews, Massive University, Associate profession and Business School.
• 3:00
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• 3:04
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• 3:07
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