Could KiwiSaver be more Equitable?

Throughout my career I’ve launched a few KiwiSaver schemes, so have a fairly long (well as long as KiwiSaver anyway) enduring relationship with what a difference KiwiSaver can make.

I’ve also seen it play out firsthand – enabling one of my children, and my stepson into their own homes and a more assured retirement for my parents.

As a result, I’ve been closely following the current conversations around KiwiSaver settings, including those centered on contribution levels and asset choices.

I believe ongoing dialogue and debate are healthy, especially when they focus on making KiwiSaver work for more New Zealanders.

It’s in that same spirit that I write this post – with concern that we may be inadvertently leaving some New Zealanders behind, especially those who may need it most.

Since the advent of KiwiSaver, employer contributions have been contingent upon employee participation – a ‘you contribute, I contribute’ mutuality.

While this works well for those who can and do contribute (it’s a great motivator), it leaves out those who can’t or don’t, potentially widening the retirement savings gap and exacerbating wealth inequality.

Although those on contribution suspension or who have opted out span across income brackets, the impact is often most acutely felt by those who have the least.

So, my contribution to the KiwiSaver conversation is this: Should employer contributions be universal i.e., not contingent on employee contributions, in order to foster a more inclusive and equitable retirement savings environment?

In a climate when every dollar counts, pausing your own contributions may be a necessity, but should this mean losing out on employer contributions too?