Monthly Archives: November 2016

Kiwi Saver reform?

Long John might not  be aware that Kaspanz has suggested any move to make Kiwi Saver compulsory, must include a Government Guarantee. The move to making individuals more responsible for their retirement savings, and the loss of workplace pension schemes, has taken place by stealth and default, rather than sound Public Policy planning!

Not every conspiracy is a theory

Long John saw this great line on a movie poster recently.  It reminded him that being paranoid doesn’t mean they are not out to get you.

 There’s no shortage of conspiracy theories these days.  Even the new President of the United States has been putting one or two about (most of them seem to have faded away, now that he has won).

 Long John has a conspiracy theory of his own.  It resurfaced last week thanks to a speech by Hon. Sir Michael Cullen, the father of both KiwiSaver and the New Zealand Superannuation Fund.

 Sir Michael spoke at the Workplace Savings Conference and reportedly argued for KiwiSaver to be made compulsory.  Readers of Long John’s second blog will know what he thinks of this idea.  Many low income New Zealanders simply don’t earn enough for them to sensibly contribute to a retirement savings scheme.  This circumstance will hopefully change during their lifetimes, but if it doesn’t, New Zealand Super will maintain their incomes at pre-retirement levels.

 But what if there is a drive to trade off compulsory KiwiSaver savings against New Zealand Super?

 This would be in line with international trends towards shifting more of the costs of retirement income onto individuals and away from the state.  This is not a conspiracy theory, this is a well-recognised development.

 Nay, to get to the heart of the matter – and to set to rest concerns that Long John is completely delusional – readers should take a look at the last four pages of this paper written by Sir Michael Cullen in 2012.  In it, he proposes two possible approaches to offsetting an individual’s KiwiSaver balance against the cost of their New Zealand Super.One wonders whether this was Sir Michael’s agenda all along. That might be a touch too paranoid. 

 But, although he’s no longer in a position to wield Executive Power, Sir Michael is pretty well connected and influential. KiwiSaver is talked up endlessly in the financial press, despite there being many other ways to save for retirement (as attendees at last week’s Workplace Savings Conference would know only too well).

 Long John doesn’t know if both sides of the compulsion sandwich were discussed at the conference.  To find out, he’ll need to debrief a couple of well-placed moles.