Time for Automatic Enrolment,Kiwisaver Study

Time for Automatic Enrolment,Kiwisaver Study

With increasingly broad and diverse membership, the time has come to introduce autoenrolment for all New Zealanders according to the latest annual research into consumer perceptions of the KiwiSaver scheme released by the Financial Services Institute of Australasia (Finsia).

Previously, this research has found differences in membership according to educational attainment and working status, with self-employed and part-time workers less likely to be members of the scheme.

Finsia CEO Russell Thomas F Fin said, “Understanding change in consumer perceptions over time is vital, particularly as the KiwiSaver scheme has been the subject of much legislative change during its short operation.” UMR Research conducted 1008 online interviews based on a survey instrument designed by Dr Claire Matthews of Massey University. The research compares findings of consumer perceptions of the KiwiSaver scheme conducted in 2011 — including, the importance of saving for retirement; sources of financial advice; and attitudes to changes announced in the 2011 budget. In this year’s survey, New Zealander’s levels of engagement with KiwiSaver were specifically tested. “As expected there is a relationship between the size of a person’s KiwiSaver account and their level of engagement in it, but the level at which that engagement kicks in is lower than expected, being in the $2501–$5000 band,” Dr Matthews says. Dr Matthews also found that misunderstandings about some elements of the KiwiSaver scheme remain.

“Despite KiwiSaver having being around for more than five years now, there is still a lack of awareness about the opt-out and contribution holiday provisions, and whether the scheme applies to the self-employed.”

There are significant age and gender-based differences in engagement with retirement savings. Dr Matthews found that men (63%) are more likely to have other investments and savings to help them in retirement than women (47%). Similarly, 18–19 year olds are less likely to hold other savings and investments (9.1%) than 60–65 year olds (79%).

Commenting on these findings, Finsia CEO Russell Thomas said, “Finsia’s research into retirement savings shows the importance of driving engagement in superannuation schemes deeply and early to improve retirement outcomes.

“The increase in the percentage of New Zealanders that support KiwiSaver membership being made compulsory shows that the government should act on its commitment to consult on automatic enrolment for all New Zealanders who are not already in KiwiSaver.”

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