KiwiSaver options need careful exploration

BusinessNZ has called for a time of careful consideration before any decisions are made on automatic enrolment for KiwiSaver.

Chief Executive Phil O’Reilly says employers are supportive of employee choice and the reasoning behind making enrolment automatic would have to be sound.

“It should be acknowledged that KiwiSaver might not be appropriate for all people in all circumstances.

“Another point to be addressed is KiwiSaver’s tendency to displace a certain amount of existing savings.

“These factors raise questions about the necessity of making KiwiSaver enrolment automatic at this stage.”

Mr O’Reilly said any moves in that direction should be transparent and employers should have the ability to contribute to the decisions.

“Any sudden change to the scheme would have a significant impact on employers, and those with stretched wage budgets experiencing tight business conditions would find a sudden potential increase in co-funding costs hard to deal with.

“Compliance costs would also need to be carefully considered.”