KiwiSaver 9th in global rating
Report suggests improvements
New Zealand should increase KiwiSaver contributions and expand its coverage to improve the country’s retirement income system, according to a global study.
The Melbourne Mercer Global Pension Index, which benchmarks retirement income systems around the world, included New Zealand for the first time this year giving it a “B” rating.
Although that might seem like an average result, no country received an A rating overall for its pension system. The top-ranked country was Denmark, followed by the Netherlands and Australia, which all received a B+.
New Zealand ranked 9th behind Norway, Finland and Sweden, Singapore and Switzerland.
New Zealand performed well when it came to the integrity and adequacy of the system, but was let down by its sustainability assessment, getting an overall rating of 67.4.
The report said New Zealand’s overall index value could be boosted by increasing the level of KiwiSaver contributions, raising the level of household savings, increasing the focus on getting an income from retirement savings rather than a lump sum and continuing to expand the coverage of KiwiSaver.
KiwiSaver has a minimum contribution rate of 3 per cent for employees and a further 3 per cent from their employers. About 2.79 million people were signed up to the scheme as of the end of September and more than $40 billion is invested in it.
However, about 500,000 workingage people are outside KiwiSaver and many who are in the scheme do not contribute anything to it.
In the run-up to the election, Labour said it wanted to make KiwiSaver universal and lift the contribution rate gradually to 4.5 per cent.
Labour finance spokesman Grant Robertson told the Herald last month that those who were not in the scheme were largely on low incomes.
If elected, Robertson said, the party would develop a plan in conjunction with business and unions to bring low-income workers into the scheme in a sustainable way as wages rose.
Robertson said it would still exclude students, beneficiaries and self-employed people from having to join KiwiSaver.
The Labour-led government has committed to keeping the age of entitlement to New Zealand Superannuation at 65.
Rebecca Howard
As China’s Inner Mongolia Yili Industrial Group eyes up a possible expansion into Australia, its New Zealand operation is picking up steam with plans to build a state-of-the-art laboratory and to invest at least another $200 million.
Oceania Dairy — the South Canterbury-based dairy company owned by Yili — is in the process of commissioning the second stage of a development, which includes a canning and blending operation for infant formula and two UHT manufacturing lines, said general manager Roger Usmar.
The first stage involved a 10-tonne an hour infant formula capable dryer. Total investment so far is about $400m.
The third stage of development will likely include a second, larger dryer and a lactoferrin plant, although the dryer’s size has not been determined, Usmar said. Meanwhile, “we arguably have a stage two-B and we are working through the approval process”, he said. —