KiwiSaver scheme, the poll [Archive]

Sniper

18th May 2007, 10:54

onearmedbandit

18th May 2007, 11:00

One of my concerns is a lack of guarantee on returns as highlighted by Gareth Morgan last night.

Sniper

18th May 2007, 11:00

One of my concerns is a lack of guarantee on returns as highlighted by Gareth Morgan last night.

Thats what I noticed too. Another reason Im not going to jump in head first

James Deuce

18th May 2007, 11:02

I came to the same conclusion about the lack of guarantee without Gareth Morgan's help.

It's just another way of stuffing Government coffers so they can steal your money later if there is an "economic downturn", artificial or real.

My advice? Don't subscribe. Open an advantage saver type account at your bank, one that earns more interest if you don't touch it, and stick $40 a fortnight in it.

Quartermile

18th May 2007, 11:04

I cam to the same conclusion about the lack of guarantee without Gareth Morgan's help.

It's just another way of stuffing Government coffers so they can steal your money later if there is an "economic downturn", artificial or real.

My advice? Don't subscribe. Open an advantage saver type account at your bank, one that earns more interest if you don't touch it, and stick $40 a fortnight in it.

Agreed, remember the NZ Govt tried this before, then good old Muldoon nicked all the money back.

Deviant Esq

18th May 2007, 11:11

Not sure if it would be stuffing the government's coffers. From the Sorted website (www.sorted.org.nz):

"If you prefer, you can choose the provider organisation your KiwiSaver funds are sent to and the type of investment option for your savings. If you would rather not choose, the government will allocate you a default scheme, or your employer's chosen scheme, if they have one. You can change this later if you wish. It’s a good idea to consider the options and make an informed decision."

I'm still not decided on the scheme overall either, though it seems a good way for me to save a deposit for my first home. Still, I'd like more solid information... Sorted's information isn't updated since the scheme got improved.

kiwifruit

18th May 2007, 11:13

I'm not keen on the idea at all and certainly won't be putting money into kiwisaver

Toaster

18th May 2007, 11:22

My advice is to retire debt off mortgages where your interest cost exceeds any likely gain you may make from savings. It is a net loss position to you unless the scheme can net you more after tax than the corresponding interest rate on debt.

bobsmith

18th May 2007, 11:22

I have to wait till 65!!!!!!!!! to get my money back??? shit.... I seriously don't expect to live that long...

dnos

18th May 2007, 11:52

There is no way I will get into that, got better things to put my money into.
The previous posts have all pointed out very good reasons that I agree with.
Think it through people, and then make a decision based on your own conclusions cos lets face it noone is the same.

James Deuce

18th May 2007, 11:55

Not sure if it would be stuffing the government's coffers. From the Sorted website (www.sorted.org.nz): (http://www.sorted.org.nz%29:)

"If you prefer, you can choose the provider organisation your KiwiSaver funds are sent to and the type of investment option for your savings. If you would rather not choose, the government will allocate you a default scheme, or your employer's chosen scheme, if they have one. You can change this later if you wish. It’s a good idea to consider the options and make an informed decision."

I'm still not decided on the scheme overall either, though it seems a good way for me to save a deposit for my first home. Still, I'd like more solid information... Sorted's information isn't updated since the scheme got improved.
*cough* bullshit *cough*

It's linked to IRD and the funds can be recalled at will.

Bet you anything you like that you get about $1000 away from a reasonable house deposit and the scheme is folded to combat the falling standard of living in NZ due to all the "knowledge workers" moving to the Philippines to work in call centres.

James Deuce

18th May 2007, 11:58

I have to wait till 65!!!!!!!!! to get my money back??? shit.... I seriously don't expect to live that long...

People still don't get this tax thing, do they? You don't get anything "back". The current tax take deals with the current outgoings. It isn't saved for you specifically for "later".

jetboy

18th May 2007, 12:03

onearmedbandit

18th May 2007, 12:10

Yup, and wages won't be afftected by the fact employers have to contribute the same amount as you by 2011.

limbimtimwim

18th May 2007, 12:12

*cough* bullshit *cough*

It's linked to IRD and the funds can be recalled at will. You contridict my superannuation provider. Where are you getting this from?

beyond

18th May 2007, 12:13

One of my concerns is a lack of guarantee on returns as highlighted by Gareth Morgan last night.

My sentiments exactly!

Picture you are five years from retirement and tossed all your spare mulla into this scheme. Then they fold or it gets mismanaged and we have Equiticorp all over again.

You go into retirement with zilch while some of your mates live off the rent on four rentals.

James Deuce

18th May 2007, 12:21

You contridict my superannuation provider. Where are you getting this from?

The paper this morning.

SimJen

18th May 2007, 12:48

Its bullshit, heaps of big NZ companies are shutting up and relocating overseas, and then the government expects these companies to start making their own contribution at a slowly ramping rate, effectively negating any effect of the company tax break.....typical homo Cullen. smug little rodent!
It won't last, as soon as the next party gets in it will be canned, unless labour pass another law too stop it......seems they can do anything whether its wanted by the people or not.
I for one, definately won't be joining it. I prefer my money (or tax if you like) to be in my hands not a false facade for a future retirement income that won't happen.
Like someone said, not everyone will make it to 65 :) I expect my other investments will see me through retirement if I make it anyway.

Storm

18th May 2007, 14:43

You all know what to do at the next election folks :yes:

McJim

18th May 2007, 14:49

I think it's a great idea - we all put in 4% of our income to save the Kiwi. Apparently they are an endangered species after all......

Only this government could come up with something so lame - should have called it New Zealand Saver. You don't get Scottish government papers called Haggissaver ffs.

Methinks they're just trying a little bit too hard to be a proper governtment.

NighthawkNZ

18th May 2007, 14:57

hmmm sounds fimilar... there is nothing new about this its same as the super use to be... but that was all done via the government, till Mulddooooone spent it all... this time round no governement guarantee and its all done via private companies, that can go belly up...

Its sort of the same idea as OZ have... however, a few of the companies in oz have gone bust and a lot of their clients were just about to retire... and now have nothing...

I am not rushing in to it... I would rather have my tax cut and let me choice where I spend and save my hard earned money

Swoop

18th May 2007, 15:04

They can all fuck off!
I need all my money NOW to pay for the fucking price of OVER taxed petrol!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

(Did I provide enough incentive to get rid of this retarded, moron gubbinment?):scratch:

Can we have an election now? PLEASE!

Reckless

18th May 2007, 15:17

I wasnt keen on the idea until I saw the news last night. Employers will match your weekly/fortnightly savings dollar for dollar by 2011. Plus you can use it to buy your first house after 5 years with a lump sum of $5000 by the govt.

Thats if that company hasn't gone overseas to avoid the increased labour cost. After all isn't that the soul reason F&P left. So what do they do, increase the cost of having staff...Go figure???

I for one, definately won't be joining it.

Same i won't either, not till they take the burden off private companies and use the profits they make on re investing our money overseas and put it back into the scheme. As i think they'll make heaps more then they are giving out.

SPman

18th May 2007, 15:26

Sounds like they're gonna go down the same way Oz has - employer "contributes" 10% of your gross wage into a Super fund of your choice.
If you leave the country - you get the money - unless you're a Kiwi!

jetboy

18th May 2007, 15:40

Yup, and wages won't be afftected by the fact employers have to contribute the same amount as you by 2011.
Yeah you'd hope so aye.

There are certainly good and bad points to this scheme. I was 100% against before I saw the news last night, but am not so sure now. Don't know if I like the idea of the government having control of my dosh.

BuFfY

18th May 2007, 15:41

JimO

18th May 2007, 15:45

Swoop

18th May 2007, 15:47

If the retard "minister of treasury" wishes to control inflation, why dosen't he regulate the loanshark industry like GE money, Instant finance, etc???

ynot slow

18th May 2007, 18:58

my employer has a scheme with an insurance/finance outfit,we can put in up to 3% of gross wage and they match it same amount.we can put in more but company will only do 3%,out of the companies proportion comes all fees so our part is net contribution,we have option of low to high risk where our money goes to,i.e most(80%) will go in low risk funds and say 20% of my funds go high risk,based on the predictions,not sure howmany believe the insurance companies predictions though.we can still go on kiwisaver if we like but won't get companies support re dollar for dollar.

marty

18th May 2007, 19:28

From what I know about it, which isn't all that much, I think it would benefit me quite well. From going into as being a student with no money, loosing 4% of my wages wont matter all that much to me.. and essentially the govt is giving me the added money.. as I will be a teacher
Or am I mistaken?

i think you'll find teachers already have a super scheme - like police do. for teachers it is the State Sector Retirement Savings Scheme. police have the PSS - still runs at 2 for 1 from memory.

http://www.minedu.govt.nz/index.cfm?layout=document&documentid=9555&data=l#P145_4828

Motu

18th May 2007, 19:37

hmmm sounds fimilar... there is nothing new about this its same as the super use to be... but that was all done via the government, till Mulddooooone spent it all...

Yep,good old Super - you put in a $,your boss put in a $ and the Government put in a $ - we saw none of it.But that was the nasty National Party,thank God they will never get back in and scrap the scheme......

bane

18th May 2007, 19:52

If you can choose the level of risk with the provider, than im in.

Im currently in a company super scheme with no subsidy - has returned between 5 and 8% a year after fees and taxes. It has no guarantees...

Contribution by Govt and employer makes Kiwisaver pretty attractive - assuming you can, id just choose a fairly conservative investment strategy (say 75% term deposits/bonds, and 25% stocks and property), and enjoy the 50% return from the subsidies (i.e. 4% from me, 2% from subsidies). Who cares if the scheme is only returning 4% on average... I cant get 50% return a year from anything else (including property capital gain).

Providers such as AMP and ING may rob you blind with fees, but are not likely to go belly up in a hurry.

onearmedbandit

18th May 2007, 19:54

Nice little super scheme Cullen and his cohorts have got. Thanks to legislation passed in 1993 every MP who was an MP before 1993 gets to contribute to their own super fund. We help as well, for every dollar they put in we put in two. Do you like that? We can bitch and moan about Cullen, but he laughs quite comfortably on his $200,000+ a year income knowing that he is milking the taxpayer for his retirement as well. *sniff*, makes me proud to be a kiwi knowing that I'm helping these poor souls out.

KATWYN

18th May 2007, 19:59

im self employed with no employees and any future employees will be put on contract so they are self employed as well...fucked if im going to help them save for their retirement with money i need for mine

Yea well i'm an employer as well, I have been receiving info from the IRD etc about Kiwisaver....it goes straight into the "non priority tray" unread. I can't be bothered

I'm sick of yet another compliance the employer becomes responsible for, who pays us for the administration processes? if the government have issue with it - whatever *rolls eyes*

Oakie

7th June 2007, 21:54

I'm interested because I do HR / Payroll at work and we've been trying to get a handle on what the uptake will be like.

I'm also interested to hear people's comments as to whether they think they've had enough information on it yet.

Also refer to this previous thread http://www.kiwibiker.co.nz/forums/showthread.php?t=50123&highlight=Kiwisaver

jrandom

7th June 2007, 22:02

for someone who condones beastiality you sure do like raping a subject to death

Hitcher

7th June 2007, 22:05

Option 8: My employer-funded scheme already complies with Kiwisaver.

jrandom

7th June 2007, 22:09

if i were a rich man, ya ha deedle deedle, bubba

peasea

7th June 2007, 22:13

My old man used to say....
"If you have a contract with the government, you don't have a contract"

He was a good bloke, I trust his judgement.

Deviant Esq

7th June 2007, 22:26

cowboyz

7th June 2007, 22:28

it money for nothing and that cant be a bad thing.

I'll take the grand a year from the government if thats what they want ot give me.

Disco Dan

7th June 2007, 22:31

I voted "whats kiwisaver".

Is that something to do with that horrible kiwibank?

Steam

7th June 2007, 22:36

I will join when I change jobs soon. I could spend the money on paying off my loans, but in reality I would just spend it on junkfood and motorcycles.
So I am being forced to save, which is good.
I actually appreciate a nanny state. I lack the self discipline to do it myself, like many other Kiwis.

MadDuck

7th June 2007, 22:44

Kiwisaver...its a big can of worms

The employer can not make recommendations to their employees.

If you have a mortgage you have to sit down and work out the sums. Would I make more in KS versus what I would pay off on my mortgage. For the average kiwi I would suggest not.

Interest rates climbing and 4% from employers is graduated. Try going to

sorted .org

That will help. Damn all that free advice and I should be charging.

Conquiztador

7th June 2007, 23:05

MadDuck

7th June 2007, 23:17

The gov. is giving away free $$'s. $1K a year, tax deductions, $$'s toward the fees, employer MUST contribute, U can use the $$'s to buy your first home.

I employ 40 staff and I will put in place a 4% contribution from word go. Why? Because I care about my staff.

If U are in permanent employment I can not see any reason why you would not join? Look at all the +65's now trying to survive on super. What a struggle.

Sorry have to diasgree. The govt is giving away $1k capped. Now if interest rates rise as they are?

Interest say on a $250,000 mortgage with floating rates about to increase vs the average employer who cant cope with the increased costs. 4% on your payroll may be insignificant but try it one a payroll of 150 employees. Thats on top of the new holiday provisions .....

oldrider

7th June 2007, 23:54

Gremlin

8th June 2007, 01:03

If they allowed you to pull out of the scheme entirely after joining it for five years in order to buy a first house, I'd probably opt in, buy my first house, then can it. But I don't think they let you pull out after that, once you're in, you're in. So at the moment it's probably not, but I'll see what happens.
yeup, you wouldn't think its that easy eh?

you have to be in for at least 5 years, and you can only take some out, to buy a home (this excludes govt inputs)... It has potential, but fuck that, 1, I could potentially be figuring this out for my bosses small business in time (there's one massive dis-incentive), 2, I despise the government telling me how to manage my money, when they seem to do far worse with the money they take off me, compared to how I manage what I miraculously get each month.

edit, oh, and 3, its unsecured... I don't trust the blubbermint to begin with... and the money they want to take off you could all go poof?

Karma

8th June 2007, 01:05

Hmm... given the government owns mighty river power, who in turn own murcury, and the kiwisaver is fed into the government, it's therefore logical that anyone signing up to kiwisaver is funding killers!

Have you no morals?!?!?!

Ghost_Bullet

8th June 2007, 05:03

2, I despise the government telling me how to manage my money, when they seem to do far worse with the money they take off me, compared to how I manage what I miraculously get each month.

I went to a seminar yesturday about my own company super, which provides dollar for dollar input. With other good beifits included.
The company managing the fund is Mercer, and there is a range or companys whom you can choose to manage your money through the Kiwisaver scheme, so in effect the gov seems to be just a middleman who takes and transfers the money to the sheme you choose. **correct me if I am wrong**

I will be likley to join the Kiwi S in addtion to my own current.

sAsLEX

8th June 2007, 05:21

My old man used to say....
"If you have a contract with the government, you don't have a contract"

He was a good bloke, I trust his judgement.

Government Super used to be good. Inflation adjusted salary for the rest of your life, still have it here in the RN over here in the UK.

MisterD

8th June 2007, 07:04

Option 8: My employer-funded scheme already complies with Kiwisaver.

How so? My employer has a contributory scheme already, but if I want the gummint $$s as well I have to join KiwiSaver in addition....to get maximum $$'s from both employer and Cullen I have to save 10% of my salary. (Roughly, work scheme calculates on net, KS on gross)

NighthawkNZ

8th June 2007, 07:22

Yea well i'm an employer as well, I have been receiving info from the IRD etc about Kiwisaver....it goes straight into the "non priority tray" unread. I can't be bothered

I'm sick of yet another compliance the employer becomes responsible for, who pays us for the administration processes? if the government have issue with it - whatever *rolls eyes*

I'm sure my boss will make me self employed so he don't have to deal with it either... :scratch:

Hitcher

8th June 2007, 08:46

KiwiSaver is still light on detail. My understanding is that from 1 July it only affects new employees.

And any $1000 contribution from the Gummint will go into your scheme -- you won't be able to use it to buy a flat-screen plasma for the World Cup.

Oakie

8th June 2007, 09:22

I checked, (WIFM)
You had no column for, do you qualify for Kiwi saver?
I am automatically disqualified by age discrimination! :nono: John.

Sorry John. I realised that about 5 minutes after I went to bed last night.

KATWYN

8th June 2007, 09:46

I'm sure my boss will make me self employed so he don't have to deal with it either... :scratch:

Oh well if he "deals with it" it will mean less in your wages every week, your precious wage deduction will go into a supposed "savings account" for you later on in life. (yea right)

No doubt the goal posts will change just like the super annuation scheme a few years ago did.

Gosh what a good idea to tax people even harder under a veil of a "savings scheme" - and who will benefit from the slush funds interest in the meantime?

Well, based on very little knowledge thats my take on it - it would be hard to convince me otherwise.

BTW, isn't it YOU that makes YOU self employed? Exactly how much power do you give your boss over your life decisions??

inlinefour

8th June 2007, 10:03

http://www.kiwisaver.govt.nz/

What are your opinions about this? I personally like the idea as its a good way to save but there are still too many grey areas like what happens if you leave the country ect?

Im in, but I might give it a few months to see how it pans out.

sounds like a crock of shit and if anyone else who does not considers NZ's track record including the BNZ saga and still be prepared to invest would be IMo slightly psychotic...:shit:

NighthawkNZ

8th June 2007, 10:29

Oh well if he "deals with it" it will mean less in your wages every week, your precious wage deduction will go into a supposed "savings account" for you later on in life. (yea right)

No doubt the goal posts will change just like the super annuation scheme a few years ago did.

Gosh what a good idea to tax people even harder under a veil of a "savings scheme" - and who will benefit from the slush funds interest in the meantime?

Well, based on very little knowledge thats my take on it - it would be hard to convince me otherwise.

BTW, isn't it YOU that makes YOU self employed? Exactly how much power do you give your boss over your life decisions??

being self employed means I can ask for more tho... hmmmm :lol: :D

James Deuce

8th June 2007, 10:32

The gov. is giving away free $$'s. $1K a year, tax deductions, $$'s toward the fees, employer MUST contribute, U can use the $$'s to buy your first home.

I employ 40 staff and I will put in place a 4% contribution from word go. Why? Because I care about my staff.

If U are in permanent employment I can not see any reason why you would not join? Look at all the +65's now trying to survive on super. What a struggle.

You've got it arse about face Conquiztador.

The Government is getting money for free from businesses and taxpayers.

No one will ever see any of it except Treasury.

A fool and his money are soon parted. A fool who willing gives money to a Government didn't deserve it in the first place.

Grahameeboy

8th June 2007, 10:38

You've got it arse about face Conquiztador.

The Government is getting money for free from businesses and taxpayers.

No one will ever see any of it except Treasury.

A fool and his money are soon parted. A fool who willing gives money to a Government didn't deserve it in the first place.

But people get Super so what makes you think this is a stitch up by the Govt?

The Pastor

8th June 2007, 11:22

If the government doesnt pay out, or at least refund my money, i'd take them to court!

davereid

8th June 2007, 11:23

For many of us, Kiwisaver will either be useless, or delay retirement.

Why ?

We are seldom the same age as our partner.

Assume you are 10 years older than your wife.
When you turn 65, you are eligible for NZ superannuation ("the pension"). Your wife is not, but she can be included in yours, and you will take home $406.44 weekly as superannuitants.

But you have both contributed to kiwisaver.

Problem 1.
You are BOTH on the pension, but your wifes money remains tied up until she qualifies.

Problem 2.
Any income over $80 gross per week reduces your pension by 0.70c per dollar. So not only will you pay tax on the interest you earn on your kiwisaver investment (at 19%-33% depending on your income), you will also effectively lose 70% of your pension. So your Kiwisaver investment will not actually improve your lifestyle in any major way, as 89% of its returns vanish in tax, and pension reductions.

So, you WILL have a nice nest-egg. But it is so heavily taxed that it will be of no value to you. (Until one of you die !)

Better you spend the $8k per year that you were going to put into Kiwisaver on wine women and motorcycles, than waste it in kiwisaver!

Oakie

8th June 2007, 11:26

One point people. It's not the government that holds the funds. The funds are manged by the sort of companies that have been managing retirment planning for years. The government only extracts the money from the employer via the IRD and passes it onto those approved scheme managers.

The http://www.sorted.org.nz/ site is useful and their Kiwisaver calculator is a handy wee thing for demonstrating what you get for what you give. In my case, $33000 in and $115000 return based on my age, and salary. I contacted them a few days ago to find out what assumptions the calculator uses incase they were a bit optomistic but the reply was that is assumes a growth of 2.5% p.a. (return on the money invested) and inflation of 2% p.a. which I think is fairly conservative overall.

I'm going to get into it but not straight away. I'll wait until my next pay-rise comes through and do it atthe same time so I won't feel the bump too much.

Hitcher

8th June 2007, 11:29

None of the money collected for the KiwiSaver scheme is collected on your behalf by Government nor resides in Government coffers. You will choose your preferred scheme provider, advise your employer of that organisation and your and your employer's contributions will be deposited in that scheme.

One of the criticisms of KiwiSaver is that none of these privately-managed funds are Government guaranteed i.e. if your fund manager makes dodgy decisions or goes tits up, then that is your hard luck.

Oakie

8th June 2007, 11:50

Problem 2.
Any income over $80 gross per week reduces your pension by 0.70c per dollar. So not only will you pay tax on the interest you earn on your kiwisaver investment (at 19%-33% depending on your income), you will also effectively lose 70% of your pension. So your Kiwisaver investment will not actually improve your lifestyle in any major way, as 89% of its returns vanish in tax, and pension reductions.

I don't think that's correct. The payment of your savings is not automatically paid as a pension but is paid in one lump sum when you turn 65 and you can do what you like with it. Overseas trip, new car (I mean Bike), hip transplant, penis extension etc.
You'd only be penalised on the interest the lump sum earns if you invest it instead of spending it. That assumes that you pop the payment in the bank with the purpose of earning interest and not drawing on the lump sum.
As far as the lump sum is concerned, it's an asset, like a house and owning a house does not reduce your pension.
I think in a few years you're going to see a lot of 65 year old Harley riders around. (HD might have to adapt the NZ models to provide Zimmer frame storage).

James Deuce

8th June 2007, 11:56

ManDownUnder

8th June 2007, 11:57

It's asking me to put a lot of my money into a scheme that relies on 3rd party investment houses, and lock it up until I'm 65.

It's a complex system that is going to have a couple of unexpected benefits/shortcomings when the clever dick accountants try to manipulate it in their own best interests.

It may be a good idea, but there are too many moving parts beyond my control right now so I'll take my normal "slowly as she goes" approach to this stuff. Others can step in, suffer the shortcomings and corrections, and if/when if proves a worthy investment vehicle... I'll be in.

Much like a Windows upgrade. Don't do it till SP2 is released.

Karma

8th June 2007, 12:01

I think the workers in the UK would tell you that pension schemes are inevitably flawed... you NEVER get out what you put in, so why bother.

Me personally... I'll just open up a (relatively) high interest savings account and have some of my wages automatically transferred there every month... just means I've gotta be careful about not dipping into it.

On a side note... why would you want to retire anyways? Retirement means death you know... you just wither up and die.

Oakie

8th June 2007, 12:13

Much like a Windows upgrade. Don't do it till SP2 is released.

Dammit! I was just going to say that.

Arthur

8th June 2007, 12:14

I'm not too keen on the idea, but that stems more from the fact all members of the Defence Force are required to be part of the Defence Force Super scheme. If we choose to go with KiwiSaver, it is in ADDITION to the standard super scheme we have. It may not make much difference to how much we get in the hand each fortnight, until you take into account that the majority of us are on a reasonably low salary.

Checkers

8th June 2007, 15:37

whats the deal with kiwisaver and why is it in the poll?
someone fill me in?

inlinefour

8th June 2007, 15:59

But people get Super so what makes you think this is a stitch up by the Govt?

By the time I get to retirement, super will long since be a thing of the past. Anyone who disagrees would be considered delusional... :mellow:

KATWYN

8th June 2007, 16:03

If the government doesnt pay out, or at least refund my money, i'd take them to court!

:laugh: :killingme

By the time I get to retirement, super will long since be a thing of the past. Anyone who disagrees would be considered delusional... :mellow:

Yea along with the Kiwisaver scheme, funds and all.

avgas

8th June 2007, 16:39

I think its a really nice way for the govt to say....."HAHA fuck you! you thought you could get money from us when your 65...."
The govt has screwed me enough for the first 25 years. Thanks to the student loan scheme i will be screwed for the next.....now its guaranteeing that the last will be screwed without my intervention.
I wonder if i can leave something like "all my money to go to anti-beehive suicide bombers" in my will.

Oakie

8th June 2007, 18:27

whats the deal with kiwisaver and why is it in the poll?
someone fill me in?

It's a voluntary retirement savings scheme initiated by the government effective 1 July this year. Employees put in 4% or 8% of their wages and employers contribute also, starting at 1% from 1 April 08 and increasing to 4% from 1 April 2011. The government also puts in $1000 at the start and puts in about $1000 per annum.The funds are passed to approved retirement plan providers and proceeds paid in a lump sum when the person reaches 65 years of age.

Oakie

8th June 2007, 18:31

IRD can recall the Government contribution any time they want.

Don't think so. I mean the government contribution will be invested by the scheme provider somewhere so the IRD will have no way of getting their hands on it. I think they did say something about being able to divert part of it to pay back an IRD debt but only with the taxpayers approval.

bart

8th June 2007, 21:26

You put in money.
Your boss puts in Money.
You get interest.

You get rich.

What's the problem?

Oakie

8th June 2007, 22:51

You put in money.
Your boss puts in Money.
You get interest.

You get rich.

What's the problem?

It's a scheme created by politicians and no-one trusts politicians not to change the rules a few years down the track. I think whatever goes into an individual's plan will be safe but the government could make changes later like change the age of entitlement to 70 for example. For what it's worth I'll take the punt because me putting in an amount then my boss matching it (eventually) gives me a 100% return without even considering growth from the investment. There are fees of course (which are partly paid for the government) but the dollar for dollar thing is pretty cool IMHO.

Bloody Mad Woman (BMW)

8th June 2007, 23:18

Going to a seminar about it on Monday - work is holding it, been reading a bit about it so will keep an open mind. Can't say I trust govts tho.

Karma

8th June 2007, 23:19

NighthawkNZ

8th June 2007, 23:58

Can't say I trust govts tho.

yup doesn't matter who yah vote for a politician gets in... :doh:

ZeroIndex

9th June 2007, 03:30

The government just want another reason to get their greedy paws on my Doll Money...

Toaster

9th June 2007, 10:22

People still don't get this tax thing, do they? You don't get anything "back". The current tax take deals with the current outgoings. It isn't saved for you specifically for "later".

Agreed. And many see Govt as a source of income... when its a bloody great drain to most workers. It's like tax credits - bullshit system of taking $100 from you, spending $95 on IRD admin then sending you back $5 and people get excited!! I'd rather have a tax-cut thanks, instead of Govt spending my money merely to give themselves kudos with thick voters who don't realise they are getting ripped off in usual Labour fashion.

Toaster

9th June 2007, 10:28

Depends who you work for... some employers are starting at only a 1% contribution... I'm fairly sure employers don't have to contribute at all, but I'd imagine some kind of business tax breaks are offered.

It will be compulsory for all employers. Yes - the corporate tax rate will come down from 33% to 30% - which will align that rate with that of Australia.

Grahameeboy

9th June 2007, 10:29

Agreed. And many see Govt as a source of income... when its a bloody great drain to most workers. It's like tax credits - bullshit system of taking $100 from you, spending $95 on IRD admin then sending you back $5 and people get excited!! I'd rather have a tax-cut thanks, instead of Govt spending my money merely to give themselves kudos with thick voters who don't realise they are getting ripped off in usual Labour fashion.

I get half my tax back on 'Family Tax Credit'

Grahameeboy

9th June 2007, 10:30

The government just want another reason to get their greedy paws on my Doll Money...

Yeah think I will wait until I retire to keep an eye on progress before I think about joining.................

Toaster

9th June 2007, 10:36

You put in money.
Your boss puts in Money.
You get interest.

You get rich.

What's the problem?

That is all well and good if you remember you don't get anything until you retire - all the while for many, mortgage debt is being paid off slower becasue some of your income is now diverted to a saving scheme.

If the contributions are affordable, then maybe the scheme isn't too bad for some with low debt levels. However this means you pay off debt slower and accrue more interest cost against your debt. Keeping in mind floating rates are now over 10% - any gains you make in super schemes has to outstrip and offset the cost of your borrowings on the other side.

People forget that when they buy a house, the interest on debt over the life of the term will cost you double or more what you paid for the house to start with.

Some other things that seem forgotten is taxation on super savings - yes it is taxed - of course - because it is income. Same with the employer contribution. This also reduces the perceived benefits of a savings scheme.

My advice is if you have a large bank debt - pay it off as fast as you can to save on interest. The faster debt repays, then the sooner you can save for retirement.

KATWYN

9th June 2007, 11:03

. For what it's worth I'll take the punt because me putting in an amount then my boss matching it .

I want to know how the hell is that going to work?? The boss matching it??! Thats a wind up ...surely.

KATWYN

9th June 2007, 11:06

I'm fairly sure employers don't have to contribute at all, but I'd imagine some kind of business tax breaks are offered.

Only to be used to match the savings amounts? Tax break for the business owner....yea right

NighthawkNZ

9th June 2007, 11:10

That is all well and good if you remember you don't get anything until you retire

Many of the companies in Oz that were doing the similar type of thing went under just before they had to pay out a large sum of people that was about to retire... now they have absolutely nothing... WFT

KATWYN

9th June 2007, 11:12

Many of the companies in Oz that were doing the similar type of thing went under just before they had to pay out a large sum of people that was about to retire... now they have absolutely nothing... WFT

Thats a horrible thing to do to people. It comes down to if we don't wanna be "done over" we have to take responsibility for ourselves. Trusting and leaving it up the bosses etc people are just asking for trouble (theres some great bosses out there but theres some horrible ones)

Oakie

9th June 2007, 11:20

That is all well and good if you remember you don't get anything until you retire - all the while for many, mortgage debt is being paid off slower becasue some of your income is now diverted to a saving scheme.
>You get it paid as a lump sum at age 65 ... regardless of when you reture
> Mortgage debt will only be paid off slower if you are paying back more than you need to anyway and then reduce that payment to accomodate the Kiwisaver contribution. I'm not sure of the specifics but you are also able to divert a portion of your contribution to your mortgage instead of into the retirement funds.

Some other things that seem forgotten is taxation on super savings - yes it is taxed - of course - because it is income. Same with the employer contribution. This also reduces the perceived benefits of a savings scheme. . The current Gov't super is taxed because it is income. For Kiwisaver though, only the interest on your investment will be taxed because only the interest is income, not the principal. If you put $1000 in the bank and get $100 interest, you are only taxed on the $100 interest, not the $1000 you put in and then withdraw.

My advice is if you have a large bank debt - pay it off as fast as you can to save on interest. The faster debt repays, then the sooner you can save for retirement. Yep. Paying off large debt at medium to high interest gives you more bang for your buck in the short term than saving for retirement.

Oakie

9th June 2007, 11:23

I want to know how the hell is that going to work?? The boss matching it??! Thats a wind up ...surely.

No. It's compulsary from 1 April 08, 1% then 2% from 2009, 3% from 2010 and then 4% from 1 April 2011

KATWYN

9th June 2007, 11:28

No. It's compulsary from 1 April 08, 1% then 2% from 2009, 3% from 2010 and then 4% from 1 April 2011

So thats going to mean manufacturers like us, regardless of tax breaks etc will have to increase our pricing to compensate ...in turn ...its going to affect you and I when we go to the supermarket...a full cart of groceries may cost a huge amount more in a couple of years time compared to now (which is bad enough)....and there will probably be no wage increases to help people either - as businesses will be feeling the strain of matching employees saving schemes??!

Toaster

9th June 2007, 11:33

In general - Employer contributions are taxed as income as well as interest income. Not sure what the go is for this scheme, but it is likley to be the same under current law.

One of the key areas I have an interest in - being in the banking industry and having spent years in taxation as well - is the efficiency of the dollar. This govt seems hell bent of coming up with different ways to give us back our own money after spending a chunk on govt administration and departments, rules and regulations to run all these schemes making it look like they are doing us a favour.

I'd like to see them give us tax cuts - the most efficient way of using our 'dollar'. If they are obsessive about inflation and housing, then maybe the cuts could come on the proviso it is used soley to retire home lending debt or save for a house - which improves the current account deficit by reducing offshore borrowing by banks to fund loans to NZ families and business.

Karma

9th June 2007, 11:41

I seem to remember somewhere the other day that the government is trying to curb the amount we're spending to ease pressure on inflation?

I'm no economist, but surely giving incentives to save money, with a knock-on effect of higher prices due to increased company taxation achieve this?

There's a mystery afoot here...

davereid

9th June 2007, 11:43

So thats going to mean manufacturers like us, regardless of tax breaks etc will have to increase our pricing to compensate

I think most employers will treat the 4% contribution as "part of your pay". ie when the union come knocking on the door asking for a pay rise, the employer will say yep, you can have 4%, dumped into your kiwisaver.

So it will result in lower wage rises for a few years, rather than sting the employer.

Oakie

9th June 2007, 13:09

I think most employers will treat the 4% contribution as "part of your pay". ie when the union come knocking on the door asking for a pay rise, the employer will say yep, you can have 4%, dumped into your kiwisaver.

So it will result in lower wage rises for a few years, rather than sting the employer.

They/we won't say so that is what they/we (damn this foot in both camps) will undoubtedly do.

BAD DAD

9th June 2007, 21:26

Seems like a good scheme for the worker on the face of it but I have got some reservations:

- If the employer is also contibuting a percentage, then that is in fact a tax on your employer who will almost certainly already be feeling a genuine burden with the existing taxes and compliance issues. Guess who won't be getting a pay-rise they were expecting? Guess who might be loosing their job sooner as the employers gradually throw in the towel?

- Like it has already been stated on this thread, if you have interest bearing debts then you would almost certainly profit more by paying those off first to avoid going backwards financially.

-Prediction: Those that do contribute to the Kiwisaver will find in future years find that any savings may work against them if they find themselves needing expensive medical or geriatric care. A future govt is likely to means test such services and so only those lazy enough ( or smart enough ) to save for such situations will be able to claim . There are plenty of examples around us in the older generations that have found that out already.

-The issue of what Muldoon and his govt did to previous "contributions" has also been raised in this thread. It happened !

We may go ahead and join the scheme but will be approaching it as a risky venture along with other plans and not as our only retirement fund.

NighthawkNZ

9th June 2007, 22:53

Thats a horrible thing to do to people. It comes down to if we don't wanna be "done over" we have to take responsibility for ourselves. Trusting and leaving it up the bosses etc people are just asking for trouble (theres some great bosses out there but theres some horrible ones)

Had nothing to do with the individual companies but the private investment companies going under. Here in NZ I beleive there are 6 goverment approved investment companies for the kiwi saver scheme.

None are government guarenteed, and the ones that my boss has read the fine print in their info packs the are not guarenteed in any way either.

Morcs

10th June 2007, 11:47

Its just another Tax...

We will all get state pension of course, as by then we would have paid all our taxes in our working life...

Unless they actually have no intention of giving our taxes back, hence they are trying to get more money from us...

Its a load of bullshit.

Rather enjoy life now, whats the point in saving all your life, when something unexpected can happen at any time?

cowboyz

10th June 2007, 20:33

Are you saying you only pay taxes because you expect it back when you retire?

Hmmmm.

Forgetting about a few things along the way? Like roading/police/health/blah blah blah

Should slash taxes and make everything user pays. That would seriously fuck some people up.

inlinefour

16th June 2007, 12:17

:laugh: :killingme

Yea along with the Kiwisaver scheme, funds and all.

Therefore I will not be touching it with a ten foot barge pole...:shit:

NighthawkNZ

16th June 2007, 12:25

The main things I hate about it is;

I don't like the govermnt (well thats about it really...) but don't like them telling me where I have to spend or safe my hard earned cash
There is no guarantee of any sort
I would rather have a tax cut/break
Its been done before and the government spent the money

NighthawkNZ

17th June 2007, 18:40

http://nz.news.yahoo.com/070616/2/n4k.html

BigG

17th June 2007, 20:25

The government is only in control for the first three months, you get $1000.00 as a top up from the Government, 4% of your wages goes into the savings, it is in your name, it is always your money, it is invested in, I think there are five providers who invest your money, each year you get a tax break of $1000 So the scheme is a good one 100% return on your money. Problem is its locked in so you cant get it till you retire, realy good if husband and wife are working and in the scheme cos after 5 years you would probably have $40,000 to put on a house as a deposit. Good for me I only have 5 years to go and would get about $25,000.