KiwiSaver

More than a third of MPs are members of a KiwiSaver scheme, according to the latest register of pecuniary interests.

Of the 122 MPs, 44 are signed up to a KiwiSaver scheme.

The highest proportion of members was within the Green Party, with five out of nine MPs joining the scheme.

Across the remaining parties 16 National MPs are members, 21 Labour MPs, Act’s Hilary Calvert and Maori Party co-leader Tariana Turia.

Ministers enrolled in the scheme include Gerry Brownlee, David Carter, Hekia Parata, Chris Finlayson and Simon Power.

Prime Minister John Key was unable to conform whether he was a member of a KiwiSaver scheme, with the register showing he has an individual retirement plan.

“I’m a member of whatever that Government scheme is that applied to members that came in in 2002,” he said yesterday.

“I think it might be [KiwiSaver] but I’m not 100% sure.”

Prime Minister John Key has dismissed comments from Standard & Poor’s analyst Kyran Curry that changes to KiwiSaver will increase national debt levels.

Speaking to Radio New Zealand, Curry said that while Government spending did need to be brought under control it should not be at the expense of household savings.

His comments came after Key delivered a pre-Budget speech last week signalling cuts to the KiwiSaver Members Tax Credit.

“I mean Kyran Curry is a bright boy so I’m sure he can work out that if the Government actually stops to save and the private sector starts saving that increases national savings,” Key said.

He said the government intended to get savers making larger contributions themselves.

Finance Minister Bill English also defended plans to change KiwiSaver.

“The fact is KiwiSaver was put together at a time when the Government had very large surpluses, now it doesn’t have large surpluses,” he said.

“New Zealanders have realised that too much debt is not a good thing. That more savings gives them a greater sense of security. KiwiSaver is one vehicle for that.”

Labour leader Phil Goff said he was concerned the ratings agency had apparently voiced doubts over the changes.

“I’m really worried when Standard & Poor’s comes out this morning and says that the changes to KiwiSaver will discourage savings, we’re trying to do the opposite.”

“What KiwiSavers out there feel is that the contract with them has been broken, and it’s been broken unilaterally by Government alone, and that discourages confidence among potential KiwiSavers,” he said.

“Why would they go into a scheme if the government changed its mind every second day and changed the conditions in a scheme that they will effectively be locked into?”

KiwiSaver is the third most popular investment class in the country, with 12% of New Zealanders believing it offers the best rate of return, according to the latest ASB Investor Confidence Survey.

KiwiSaver came in at joint third with bank savings accounts, behind term deposits in first place with 19% and rental property at 15%.

“Over the past year KiwiSaver has climbed from last place to third equal in return perceptions, the highest level yet,” said ASB head of Private Banking and Wealth Management Jonathan Beale. <

“Those expecting KiwiSaver to be their main source of retirement funding also reached a new high of 62% (up from 61% in Q4 2010), while respondents currently using KiwiSaver climbed 5% to 43% – another high.”

“After almost four years of contribution from individuals, employers and the Government, investors are starting to sit up and take notice of KiwiSaver. Fund balances are growing, and the KiwiSaver scheme has proven to be a successful way of turning around the poor savings habit of many New Zealanders.”

Beale said he believed there will be a change in investors perception of KiwiSaver in the wake of changes to be announced in this week’s Budget – which the Government has confirmed will include reductions to Member Tax Credits.

“However, we believe KiwiSaver is still likely to remain the most popular retirement savings vehicle for respondents in our survey,” he said.

OnePath has announced it has achieved two KiwiSaver milestones with over 400,000 members enrolled in its four KiwiSaver schemes and $2 billion in funds under management.

With nationwide KiwiSaver membership at 1.7 million, ANZ fund manager OnePath now leads the industry with almost one in four KiwiSaver enrolled in its schemes.

“We’re proud to have passed these significant milestones as the current membership far exceeds the original expectations when the initiative was launched nearly four years ago,” said ANZ Wealth managing director John Body.

OnePath also revealed IRD figures have shown continuing enrolment at more than 20,000 per month for the year to date.

“The continuous growth in enrolment reinforces KiwiSaver’s success in encouraging New Zealanders to start saving for their retirement. We have always advocated a consistent approach to KiwiSaver as the best way of improving New Zealand’s previously poor record of long-term retirement savings.”

Body said despite the recently announced changes to KiwiSaver the fundamental design of the scheme remains intact.

“What is most important is that we hear certainty from policy makers that KiwiSaver is here to stay, so New Zealanders can have confidence in their decision to join and save for their retirement.”

“ANZ New Zealand’s submission to the Savings Working Group recommended targeting Member Tax Credits for those on low to middle incomes and the self employed, to encourage these members to continue contributing throughout their working career. We’ll wait to see further details on the changes to Member Tax Credits in the Budget next week,” he said.

“We are at a turning point as a nation with a new era emerging focused on savings and productive investment. As a leading provider we understand there is now an opportunity to consolidate the success of KiwiSaver for the benefit of all New Zealanders and ensure the growing savings pool is put to work in building and strengthening the nation’s future economic prospects.”