KiwiSaver
Introduced in July 2007, KiwiSaver establishes
KiwiSaver is similar in many respects to other countries' retirement savings plans (for example, the Canada Pension Plan). It is government-sponsored, paid out in old age and paid only to those who have contributed, the amount depending on the individual's personal investment.
Unlike most overseas retirement plans, KiwiSaver is partly state-funded. Contributions from employers became mandatory from
The chief executive of the Ministry of Social Development determines - in contradiction to his own admission in a 2005 report to his Minister - that other countries' second-tier retirement plans have like contingencies with NZ Super and therefore warrant deductions from NZ Super entitlements. If the government's pension regime were to be applied consistently, KiwiSaver should also be deducted from NZ Super.
However, if the chief executive treated KiwiSaver in the same manner as overseas pension plans, the public would have rejected KiwiSaver. For this reason, amounts saved in KiwiSaver are paid in addition to full NZ Super: "KiwiSaver is designed to complement NZ Super" (Dr Cullen).
New Zealanders are not advantaged by working overseas.
New Zealanders working overseas are denied participation in KiwiSaver. If they save for their retirement in government-sponsored programs while working overseas, those savings translate into reductions of their NZ Super entitlement if and when they return to and retire in
New Zealanders who stay home and pay into KiwiSaver do not face the same penalties. This disparity exposes the duplicity of the government's common argument, "New Zealanders who have had the opportunity to work overseas should not be advantaged over those who have stayed home."
By distinguishing KiwiSaver from overseas pensions, the former government established a situation which no one can convincingly argue is not discriminatory.
Dr Cullen confirmed that, under current law, KiwiSaver will continue to be exempted from the direct deduction policy. The term "under current law" leaves the way open for the government to change its mind at any future date. Politicians and bureaucrats scrambled to establish, unconvincingly, that KiwiSaver does not have like contingencies with pensions subject to section 70 of the Social Security Act 1964.
Dr Cullen, for example, argued that KiwiSaver cannot be likened to overseas pensions because KiwiSaver "is not government-protected". Former Social Development Minister Ruth Dyson went one better. Her justification in July 2008 hung on a single qualifying adjective: other countries' employment-based schemes were to remain subject to section 70 because they, unlike KiwiSaver, are "overseas" pensions!
Prior to the introduction of KiwiSaver, Dr Cullen warned, "We depend too much on the savings of foreigners." His words contain a bitter irony for Kiwis whose savings the