After weeks of TV, newspaper and billboard advertising by the government, it here! Kiwisaver the new voluntary (kind of) retirement saving scheme supposedly invented to make us wealthy kiwis when we are older has now come into effect today.
In 1997, New Zealanders overwhelmingly rejected in a referendum to be subjected to compulsory superannuation deductions from their wages.
Now in 2007, the government in order to combat or dreadful savings rates have introduced a voluntary one.
It works a bit like this:
Everyone who starts a new job from today will automatically be enrolled into Kiwisaver where either 4% or 8% of their wages will be kept in a retirement fund. If you do not want to be with Kiwisaver then you have up to 8 weeks to apply to withdraw but you must at least wait 2 weeks.
If you are still in your current job, then you just ask your employer to be part of kiwisaver. Otherwise you are NOT enrolled until you start a new job.
Kiwisavers features include:
A $1,000 kick-start contribution from the government when Kiwisaver members join a kiwisaver scheme for the first time.
A tax credit paid to a members kiwisaver account matching a members contributions up to $20 a week.
A $40 annual government contribution towards scheme fees.
In addition to the above:
From 1st April 2008 Employer contributions will be phased in, starting at 1% of an employees gross salary or wage increasing by 1% per year to 4% by April 2011.
It sounds an interesting scheme and much debate has taken place. I think over time though successive governments will meddle with it to their political advantage. I reckon that the employer contribution part will be scrapped if the right wing National Party get power in next years election with them being the party of big business.
So all the balloons have been released, champagne opened and partying done as D-Day for Kiwisaver has arrived. Im sure it's going to be all over the news today.....oh and if you see any balloons with Kiwisaver written on them reaching North America or Europe then send them back...their ours lol.