[GRTV] Can politicians be bipartisan on KiwiSaver?

KiwiSaver is a can we can’t keep kicking down the road, says Mint Asset Management marketing head David Boyle.

Wednesday, August 9th 2023, 6:00AM

Over the years Boyle has been a strong advocate for a review of KiwiSaver. He would like to see the can opened and the worms inside dealt with.

“We need some structure, and some leadership from politicians, from fund managers and the industry as a whole.”

Boyle says the perfect KiwiSaver policy would be apolitical instead of the situation we’re in when every three years in the lead up to an election, politicians try to tweak ‘tidbits’ of the retirement scheme.

On National’s election policy to allow KiwiSaver to be used for tenancy bonds, Boyle says he doesn’t support any policy that changes the fundamental process of what KiwiSaver is designed for. “There needs to be a consistent approach to help New Zealanders get to retirement in a better place.”

He says if people needing KiwiSaver to pay for a tenancy bond would suggest their budgeting skills probably aren’t up to living in a flatting environment in the first place. Instead they should be building up savings, getting emergency savings in place first and letting KiwiSaver “do the magic it’s designed for.”

The Financial Markets Authority (FMA) data puts KiwiSaver membership at more than three million but regular contributions are low with almost one third of all those enrolled not contributing at all in the year to March 31, 2022. A Retirement Commission report this year found that at December 31, 2022, the average KiwiSaver balance was $27,379.

Boyle says apart from members under 18, between jobs or retired there is a massive core of salaried, waged or contract earners who are not contributing. This needs to be investigated as a government or industry initiative.

He says getting fundamentals right, such as how people are employed, should be addressed. And while the IRD and FMA have a huge amount of data, it’s a matter of asking the right questions to get the information needed to change to a policy or approach that will be beneficial to all.

Last year Commerce and Consumer Affairs Minister David Clark announced a full review of KiwiSaver. Boyle says hopefully that will mean a bipartisan approach bringing public and private agencies connected to KiwiSaver, as well as employers, together for a round table to see what needs to be done to continue the scheme's evolution and growth.

A bipartisan approach would be a fundamental shift, says Boyle, that would bring certainty, and consistency around messages that providers could could out as a collective which would address any fear of change.

Giving KiwiSaver advice to people is another issue needing a collaborative approach between the FMA, Financial Services Council, Financial Advice New Zealand and the industry ,“to work out how to provide a light advice option to New Zealanders who need it most.