KiwiSaver scheme, the poll

[KATWYN]

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]

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]

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]

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]

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]

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]

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]

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]

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:Me]

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]

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]

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]

Yea along with the Kiwisaver scheme, funds and all.

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

[NighthawkNZ:Me]

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:Me]

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