KiwiSaver Breaks Through 750,000 Mark

by Mary Swire, for LawAndTax-News.com, Hong Kong

31 July 2008

The number of New Zealanders saving for their future through KiwiSaver has broken through the three-quarters of a million mark, Finance Minister Michael Cullen and Revenue Minister Peter Dunne announced on Wednesday.

KiwiSaver – which celebrated its first birthday on 1 July – was initially projected to have 270,000 members after one year. As at 24th July the number of KiwiSavers stood at 753,576.

“This is a major milestone for KiwiSaver,” Dr Cullen announced, adding that:

“New Zealanders are serious about saving for their retirement and they know that KiwiSaver makes that easier than ever before. With three-quarters of a million New Zealanders already in the scheme, KiwiSaver has shattered all expectations."

“With nearly 30% of KiwiSavers under the age of 25, it is clear that the scheme is creating a new savings culture in New Zealand. That’s good news not just for young KiwiSavers, but for our entire economy."

Peter Dunne went on to state:

“After just one year KiwiSaver has become a standard part of the New Zealand workplace."

“Employers, scheme providers, and workers have made KiwiSaver the success it is. They realise that the scheme presents an opportunity to provide security in retirement and to build a large pool of domestic capital to drive economic growth.”

Late last year, Mr Cullen and Mr Dunne welcomed the passage of legislation giving effect to a range of major tax reforms, including employer-related KiwiSaver enhancements announced in Budget 2007.

One of the major focuses of the new legislation was to strengthen incentives to save for retirement via a KiwiSaver or a complying superannuation scheme. It required employers to match their employees’ contributions up to 4% of their gross salary or wages, phased in over four years. That measure was accompanied by a new employer tax credit of up to NZ$20 a week to help offset the costs to employers.

“These changes complement KiwiSaver incentives enacted in May in the form of a new tax credit to match member contributions of up to $20 a week, which means that members who save $20 a week will receive an extra $1,040 in their accounts," the ministers explained at the time.

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