The proposal, which would occur in 2014-15 subject to the Government’s budget balance returning to surplus, would mean that all employees would be in KiwiSaver (with those not wishing to join having to opt out). The fiscal cost is expected to be around $550 million.
The proposal, which signals the (unofficial) start of the 2011 election campaign.
It is noteworthy that the proposed auto-enrolment depends on Government being able to balance its books first (while appearing a formality in the Budget 2011 forecasts, recent events suggest this outlook might now be optimistic).
The proposal will impose costs on employers as they are required to match employers’ contributions. (This will be on top of the additional 1% employer contribution from 2013-14).
If you have any questions on the above, please speak to your usual KPMG advisor or contact: