Budget 07: The voice of workplace super

We are particularly pleased that Cullen’s budget extends equivalent treatment to existing workplace retirement savings schemes that are willing to move to KiwiSaver compliant status, or where existing employer contributions will otherwise satisfy the employer compulsory contribution obligation. “The tax credit arrangement, that will see up to $20 per week contributed by government to match an employee’s contribution, is a very proactive incentive to lift participation in workplace retirement savings” said ASFONZ Chairman John Melville. He added “ASFONZ is also gratified that government has listened to us, alongside other industry participants, and will adopt minor changes to the KiwiSaver and Tax Acts to make KiwiSaver implementation less dramatic for existing employment related super schemes”. The reduction in the corporate tax rate, which becomes effective from 1 April 2008, will also contribute a positive lift in the accumulation of savings for members of workplace super schemes. “When taken in conjunction with availability of the already announced changes (whereby eligible funds can elect to have earnings of the scheme taxed at the marginal tax rate of the scheme member, but capped at the corporate tax rate) the reduction enhances a very attractive platform for employees who are in an existing superannuation scheme or who embrace KiwiSaver after 1 July 2007” said Melville.