Teachers given more choice
The Government's experimental employer-sponsored savings scheme is being further refined.
Tuesday, December 24th 2002, 6:59AM
by Rob Hosking
Two further providers are to be added to the primary teachers’ retirement savings scheme by the middle of the year.
A spokeswoman for the Minister of Education, Trevor Mallard, says the initiative, which is being used as a model for a wider state sector superannuation scheme, will have two new providers by July. Currently all the money is managed by the Global Retirement Trust.
However, there are still no dates for when the programme is to be extended to other parts of the state sector.
Documents show that the government's subsidy of the scheme will have minimal costs in the first few years. In the current year it will cost $5.8 million, and that figure will drop to $5.1 million annually for the next three years.
One memo to Mallard from the State Services Commission says the teachers’ scheme "will be the model for other schemes" and also hints that the current level of subsidy may increase.
"The aim is to start at a modest level...with a view to increasing the amount over time," the memo says.
The scheme has proved more popular than expected. Officials suggested around 30% of teachers would join up.
However by the end of November more than 6000 of the country’s 14,000 primary teachers had signed up – or just over 42%.
That level of interest means the Treasury cost calculations are a little on the low side. On the plus side, it means there is a higher level of commitment to savings than perhaps was thought previously by officials – which bodes well for the wider savings scheme.
Ministers and officials are still in talks with the public sector unions on a wider scheme, although there are no dates on when that is going to get under way.
Rob Hosking is a Wellington-based freelance writer specialising in political, economic and IT related issues.
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