Cabinet considering extending employer Kiwisaver beyond the age of 65

NZ First leader and Deputy Prime Minister Winston Peters says that Cabinet is considering extending the age when employers have to contribute to employees’ Kiwisaver. The age employers are required by law to contribute is currently 65.

But Prime Minister Jacinda Ardern says that no decisions have been made.

And Seniors Minister Tracey Martin says “we need older people to stay in paid work”.

RNZ: Peters and Ardern send mixed messages over KiwiSaver changes

Deputy Prime Minister Winston Peters and Minister for Seniors, Tracey Martin, were at a Grey Power conference yesterday to announce an injection of more than $8 million to revamp the SuperGold card website, a new app and in funding digital literacy training for seniors.

During the announcement Ms Martin stressed the importance of maintaining a workforce over the age of 65.

“We are going to increasingly need older people to stay in paid work if they want to. We can not have 1.2 million seniors dropping out of the workforce,” she said.

At the conference, Horowhenua Grey Power president Terry Hemmingsen, who was called in to work after he had retired, asked why his employer – the government – had scrapped its contributions to his fund.

“The day you turn 65, that 2 percent employer contribution stops. With government agencies, so being in education, I could keep paying in myself, and did. But I lost the 2 percent. Now that’s discriminatory on the basis of age, wouldn’t you think?”

On that basis you could also say that paying people National Superannuation from age 65 is discriminatory on the basis of age.

But Hemmingsen has a point. People employed with negotiable wage rates can factor in things like the the employer contribution. The KiwiSaver contribution is part of an overall remuneration package, and once that ceases at 65 theoretically at least pay rates can be renegotiated.

But people employed by the Government with industry wide rates of pay, like teachers, may not be able to do that.

Perhaps a solution is for public servant pay rates to be adjusted once someone turns 65.

NZ Herald: Deputy PM Winston Peters says Cabinet is looking into changes to NZ Super eligibility

He said that Cabinet is considering changing the KiwiSaver rules so people over 65 were able to have their contributions matched by their employer.

speaking at the Grey Power annual meeting today, Peters hinted that changes were on the way in this area.

“Something like 70,000–80,000 people have come into our country … and whether they pay tax or not, have acquired full superannuation just like some of you who have worked 45 years,” he told those gathered.

“The issue of being able to arrive in our country and get full super after just 10 years is being addressed as I speak.”

Speaking to media after the speech, he said the Government was looking into increasing the amount of time someone has to live in New Zealand before being eligible for the scheme.

Asked if the Government’s position on the issue would be unveiled before the 2020 election, he said: “Very much so, yes”.

At the moment, if someone over 65 is still working their employer is not obligated to match their contribution.

Peters said this was “not right”.

“And the Government and Cabinet are looking at that matter as we speak – trying to see why that would be fair and, more broadly, why would we not keep on encouraging older people to keep on saving?

“It’s a serious question, we’re looking at that right now.”

Prime Minister Jacinda Ardern was less enthusiastic, but also non-committal:

“New Zealand First has long held a policy in this area and it’s absolutely within any party leader’s rights to reiterate that,” she said at a post-Cabinet press conference today.

“But I note that the Deputy Prime Minister also acknowledged that no decisions have been made.”

“When we make any decision related to retirement or savings, they will be announced – I’m not going to speculate on any other policy work that is being done, or has been done”.

I am concerned that Cabinet could be discussing this possibility and could make a decision according to Peters without proper public discussion and debate.

There is no reference to KiwiSaver in the Labour-NZ First Coalition Agreement.