The innovative changes to KiwiSaver suggested by the Financial Services Council today will be seriously considered by Labour as part of plans to make KiwiSaver universal, Labour’s Finance spokesperson David Parker says.
“Universal KiwiSaver is an essential part of Labour’s plan to grow the wealth of New Zealand and create better jobs that pay higher wages.
“Currently young people are defaulted into conservative funds that invest mainly in bonds and cash rather than productive businesses. These also limit the amount young people can save for retirement.
“Today’s research from the Financial Services Council shows that ‘capital guarantees on KiwiSaver balances are a much better deal for KiwiSavers than defaulting them into conservative funds’.
“This is progress towards default schemes being able to reflect the stage in life of contributors. For example they would ensure those saving for a first home deposit have their contributions protected.
“Guarantees protect investments for young people if they wish to withdraw them to buy a house in bad economic times. People closer to retirement are more likely to be in a conservative fund so guarantees are less likely to apply to them.
“To make the most of universal KiwiSaver it is important to encourage investment in growing, productive businesses. The Financial Services Council’s suggestion is one that Labour will take into account when making KiwiSaver universal,” David Parker says.