Dr Claire Matthews, an expert in retirement savings at Massey University, spoke to the finance and expenditure select committee today as part of her submission on the Taxation omnibus bill.
The bill includes proposals to drop the contributions suspension period for KiwiSaver from five years to one year, add new contribution rates of 6 per cent and 10 per cent, and allow people over the age of 65 to join the retirement savings scheme.
But Matthews said she didn’t see the value in opening the scheme to over-65-year-olds and believed a better change would be for employers to continue contributing for those still working at 65 and over.
It is currently left up to employers to decide whether they will continue to contribute or not, which Matthews said was inequitable.
“Currently the legislation says that, irrespective of the age you joined, your employer does not have to pay their contribution to your KiwiSaver account once you turn 65.
“To me, that’s unfair because a 65-year-old employee effectively gets paid less than their 64-year-old colleague.”
Matthews said the committee seemed supportive of the idea.
“They agreed it was ageist.”
She also disagreed with the approach of adding 6 per cent and 10 per cent contribution rates to the current 3, 4 and 8 per cent options, saying it would be better to have a minimum and then options to increase it by half a per cent.
Source: NZ Herald