Wednesday, December 10, 2008

True cost of KiwiSlaver exposed

The costs of KiwiSlaver are now being exposed for all to see as more and more people invest in these fly by night funds that have taken a beating in returns of late.

No $40 subsidy for member fees. The true cost to members is yet to be fully exposed when the honeymoon period ends and failing funds need to cover their actual expenses.

No tax credit to employers. Employers will now wear the full cost of providing that compulsory super. Doesn't look so good being a tax collection agent, does it?

No tax credit to members. Again, the odds for a great return are somewhat diminished.

Aah, it is so good to see the investment playing field levelled. Not quite far enough though.

The thing that still gets up my nose is why employers have to fund this super over and above the member's current gross. If I want to join a private super fund, why should I expect my employer to increase my gross pay? There should be no difference for those in KiwiSlaver.

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