KATE CHAPMAN AND VERNON SMALL

Enrolling everyone who is in work into KiwiSaver remains on the table as both Labour and National consider their election savings plans.

Prime Minister John Key was keen to get more people enrolled in the superannuation scheme but stopped short of supporting automatic enrolment.

Currently, people are enrolled when they enter a new job. Up to a million people in work have not yet joined KiwiSaver.

Auto-enrolment would see them all put into the scheme, with the ability to opt out.

Officials estimate that up to a million savers could potentially be signed up under the auto-enrolment option, creating a Government bill of $1 billion just for the $1000 “kickstart” for each account.

There are 1.75 million people in KiwiSaver now but another 250,000 have opted out of the scheme.

But it is likely the opt-out rate would be much higher under an auto-enrolment plan, perhaps as high as 40 per cent to 50 per cent.

Key said the auto-enrolment option was included in a discussion paper that was to be made public in the next few weeks.

“We are asking IRD and Treasury to provide us some advice on how auto enrolment might work and we think it’s very interesting.”

It could be something they campaigned on, he said.

People could have many reasons for not joining – a new baby, big mortgage or having to stop work, others may just not have thought about it, he said.

Tower Investment chief executive Sam Stubbs told Radio New Zealand it seemed inevitable that KiwiSaver would eventually become compulsory for those in work.

Labour leader Phil Goff has refused to outline his party’s savings plan but said it would include a more “universal savings scheme”.

There were problems extending KiwiSaver to everyone, because many people did not have spare cash to put into savings.

“There are a whole lot of New Zealanders that are struggling just to meet the day-to-day bills, that actually don’t have the ability to put money aside for savings.”

Labour is expected to announce a detailed savings policy as a key plank in its election campaign.

– Stuff

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