KiwiSaver for all being considered

Commentators have welcomed plans to enrol all workers in KiwiSaver, saying it will capture many who could not be bothered doing it themselves.

Just a week after scrapping the $1000 payment for those who joined KiwiSaver, the Government is considering enrolling all New Zealand workers in the scheme.

While it had previously planned to do so, it was forced to drop the proposal as it was too expensive with the incentive in place.

Massey University retirement savings expert Claire Matthews said while some people had deliberately not signed up, others simply had not got around to it.

Many would be people who had not changed jobs since the scheme began, and therefore had not been automatically enrolled by their new employer.

‘‘A mass enrolment certainly has some attractions, particularly if it’s got the opt out,’’ Matthews said.

Those not currently in the scheme will still have the opportunity to opt out if a mass auto-enrolment took place.

Matthews said the ability to opt out was good for those who couldn’t afford it or were making savings elsewhere.

Financial Services Council chief executive Peter Neilson said previous surveys had found about one in four nonmembers intended to enrol, but had not found the time.

‘‘You’d assume that if that was to go

A mass enrolment certainly has some attractions, particularly if it’s got the opt out. Claire Matthews Massey University retirement savings expert

ahead, a number of people who would like to be there would be nudged in.’’

Neilson said wherever the scheme ended up, there would almost certainly be some way for people to opt out or take a break.

‘‘Despite the fact our members would benefit from it, we’ve never taken a position on compulsion,’’ he said.

The Government’s consideration of the idea is also good news for the New Zealand Bankers’ Association, which only last week called for a bolder move toward mass enrolment.

The $1000 kickstart payment was canned for new members effective immediately when Finance Minister Bill English announced Budget 2015 at 2pm last Thursday.

That was because of its ‘‘considerable costs for taxpayers’’, with $2.5 billion paid out since the scheme began in 2007.

English told Radio New Zealand’s Morning Report programme enrolling everyone would be more affordable now.

English said on Friday the Government would consider mass enrolment of all workers over the next six to 12 months.

Auto-enrolling would be ‘‘much cheaper than it used to be’’, English said.

Labour Party finance spokesman Grant Robertson was not surprised the Government was reconsidering enrolling all workers in KiwiSaver, having removed the kickstart payment.

Robertson said he was pleased the Government wanted to see as many people as possible in the scheme, which Labour shared as a goal.

‘‘But I think the way of getting there, for National, is tricky – you know, having taken away the kickstart and now suddenly introduce the idea that they want auto-enrolment.

‘‘If you put that together with all of the other cuts that National have made to KiwiSaver since they got in in 2008, they have undermined the scheme.’’

Labour’s policy was to reinstate the $1000 kickstart payment.

The potential costs of mass autoenrolment would be assessed, English said.

It was expected to ‘‘catch a whole lot of people who might want to reconsider whether they should be in KiwiSaver, because it’s a pretty good deal’’.

English said no other investment could match the return of KiwiSaver, with employer and Government subsidies both contributing to a person’s savings.