Kiwi Saver - Political Issues

Political Issues

The KiwiSaver scheme was associated with one of the promises on Helen Clark's controversial 2005 pledge card. However John Key, leader of the National Party, has stated that "there won't be radical changes...there will be some modest changes to KiwiSaver". KiwiSaver therefore has broad political support, being supported by both the National and Labour parties, one of which is certain to form the next government of New Zealand. National has since capped employer contributions at 2% and reduced compulsory employee contributions to 2%, with effect from 1 April 2009. Mortgage diversion is no longer available.

Additionally, fee subsidy for those people who become members after 1 April 2009, has been removed and for those people who joined before 1 April 2009 only 1 or 2 years fee subsidy will be paid (depending upon the date the member joined).

An Otago Daily Times opinion article suggested a number of consumer-oriented reforms. He said that Kiwisaver fund managers should reveal the exact investments they are making, rather than broad categories and percentages. American mutual funds reveal the top 10 investments as a matter of transparency. In the same article, the author wrote that one should be able to attach a Kiwisaver account to a discount broker (e.g. Ameritrade, E-Trade, or the like) and choose a large number of investment options, including shares, exchange-traded funds, mutual funds, bonds, and derivatives. Americans and Australians have the ability to make such investment choices in their retirement accounts, he claimed.

On 16 July 2009, the governments of New Zealand and Australia announced plans to allow funds in KiwiSaver and Australian superannuation to be transferred between the two schemes. This would allow New Zealanders who have worked in Australia to repatriate their superannuation money to New Zealand, and likewise for Australians who have worked in New Zealand (although the latter group can claim funds after their absence for a year, under the twelve month rule.)

As of September 2012, the enabling legislation for this scheme had not yet passed Australian parliament.