KiwiSaver plan not easy for business

Employers are unlikely to be cheering the Government’s decision to go ahead with auto-enrolment in KiwiSaver, says BusinessNZ.

The Government’s plan announced today includes increasing the employer contribution rate to 3 percent in 2013, and BusinessNZ Chief Executive Phil O’Reilly said the employment impact of that hike in costs could be negative.

“The Government is timing the change to coincide with its return to budget surplus – but what about the financial health of New Zealand businesses?

“Business might have been more supportive if there had been proper consultation on the next steps for KiwiSaver.”

Mr O’Reilly questioned the need for further compulsion given KiwiSaver’s enrolment success as a voluntary scheme.

He said KiwiSaver was not the only way for people to save long-term, and corralling them into the scheme automatically would reduce their options and financial freedom, despite the opt-out provision.