Employers Assn. KiwiSaver Comments Unhelpful

“Workers have options under KiwiSaver and employers should not be attempting to get workers to agree not to join a KiwiSaver scheme if they had a pay increase,” CTU Economist Peter Conway said in response to comments today from EMA Northern.

“Employer contributions from 1st  April 2008 are offset by a $20 a week employer tax credit. This equates to 1% for someone on $104,000 and 4% for someone on $26,000 a year, for example.”

“Compulsory employer contributions from April 2008 are only 1%.  There must be a very small proportion of the workforce earning above $104,000, so who is David Lowe talking about?”

“And to say there isn’t adequate lead time ignores the fact that the compulsory employer contributions are phased in over four years, and are being subsidised through the employer tax credit.”

“Unions are also aware of the transitional arrangements which allow a 2% worker and 2% employer contribution prior to April 2008, which then allows the worker to remain on a 2% level until April 2010 and get a matching member tax credit of up to $20 a week, while from April 2008 the employer will also get a matching tax credit of up to $20 a week.”

“There are lots of options under KiwiSaver. The EMA is creating unnecessary obstacles with their advice,” Peter Conway said.