Key’s Savings Position “Astoundingly Hypocritical”

After taking an axe to Kiwisaver and leaving retiring secondary teachers in the lurch, John Key’s government is now considering making the scheme compulsory.

PPTA president Kate Gainsford described the move as “astoundingly hypocritical” coming at time when the Ministry of Education was refusing to budge on collective agreement claims that would make the system fairer for those signed up to the scheme.

Part of the Secondary Teachers’ Collective Agreement (STCA) claim was an additional 1% employer contribution to Kiwisaver, which would restore a previous employment benefit to all secondary teachers, Gainsford said.

When the National government slashed the compulsory employer contribution to Kiwisaver to 2% to fund its tax cuts, this reduced a previous benefit that was available to all teachers – the 3% of the Teachers’ Retirement Savings Scheme (TRSS).

The TRSS was closed in 2008 leaving teachers with the option of staying in the scheme or opting into the Kiwisaver scheme, which at the time was scheduled to move to a higher 4% employer subsidy. By the time Kiwisaver contributions were slashed the TRSS was already closed - leaving many members with no option but to take a cut in their retirement savings, Gainsford said.

“When the government capped the compulsory employer contribution at only 2% it disadvantaged a large group of secondary teachers (potentially 53%) who did not have access to the previous 3% subsidised scheme,” she said.

Gainsford said the Kiwisaver STCA claim would merely serve to make teachers’ retirement saving schemes even across the board.

“At a time when the Prime Minister is concerned about encouraging savings, making progress on this issue in the collective negotiations is only logical,” she said.

ENDS

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