KiwiSaver to be quicker than expected: Morgan
Uptake of KiwiSaver is likely to be much quicker than expected, according to one of the scheme’s most vehement critics, financial adviser Gareth Morgan.
Thursday, November 23rd 2006, 5:40AM
by Rob Hosking
The reason for this is the tax break on the employer contributions the government added at the last minute to the KiwiSaver Bill. “The reality is all the workforce will be offered it by employers as part of next year’s wage round – they will go 2% next year and 2% the year after that,” Morgan predicts.
Morgan also predicts KiwiSaver providers will add insurance onto KiwiSaver as a way to get more people involved. “KiwiSaver is not a viable business in its own right – at least not initially. They will offer free life insurance.
That is the gateway to get them into savings. It’s the only way they are going to be able to make money.”
Morgan also advised employers present to not to advise their employees, and to rigorously canvass the KiwiSaver schemes available, and in particular, to read the trust deeds of the schemes.
“You have a duty of care to your employees,” he told the audience. “The very least you should do is get someone independent of the industry, and qualified, to examine the trust deeds of the scheme.
Rob Hosking is a Wellington-based freelance writer specialising in political, economic and IT related issues.
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