KiwiSaver has made a great start but the growth is still to come, AMP New Zealand general manager Blair Vernon says.
“I don’t think we’ve built all the momentum we would have hoped for as a community, in terms of retirement savings. There’s still work to do.”
Vernon worries about contribution rates and says these need to increase.
“KiwiSaver made a great start. The question now is kicking on. The fall in participation rate, in terms of contributions, is a real worry. So is the fact that we’ve got a lot of people just resting on it; if they are contributing, many think 3 + 3 will get them there, and that’s not quite going to be ideal.
“I still think we’re five or 10 years away from real growth being experienced in KiwiSaver. Ten years in, it’s just too early to see how that shapes up. Again, look at Australia; 10 years in to the superannuation environment, it wasn’t what it is today. It took a bit longer. Ours may take a bit longer, too, because our contribution rates aren’t ramping up at the same rate. That will be a very different industry in 10 or 20 years’ time. Those are the kind of horizons we’re thinking about.
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