Michael Littlewood, director of the Retirement Policy and Research Centre at Auckland University, said he questioned the need to renew the agreements with the default providers.
"By then, most New Zealand employees will be KiwiSaver members and auto-enrolment will be unnecessary."
One usually never fails to be amused by such plonkers from academia when they spout forth. For example, the estimable Mr Spoonley with his race-baiting rants from the towers provides top class regular entertainment. At least this one does admit a pecuniary interest being a director of a non-default provider.
However I do take issue with his "... New Zealand employees will be KiwiSaver members and auto-enrolment will be unnecessary ...". I would hazard a guess that many employees, like myself, will never join KiwiSlaver no matter what bribes are offered. It's like turning up at the WINZ office for a fortnightly handout. Something I wish never stoop to.
But I do wonder if the nice Mr Key is about to change the KiwiSlaver rules? So that all employees will be made compulsory members in 2014. The spewing forth from the ivory tower of one without skin in the game may have inadvertently given things away.
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compulsory KS is a given, especially now the Govts of the world have Hungary as an example to follow, where they have Nationalised the accounts. Then there is the ructions currently happening in Ireland, Spain and Portugal wjere to one extent or another, the Govt are forcing the Superannuation funds to divert their bond holding activity from off shore to on shore; all with the goal that your own people will just lump it if you default on your obligations, whereas someone else with a bigger and better equipped army might get shirty if you don;t pay the bills.
So my prediction is once KS is compulsory, the next more socialist Govt of the day will cajole the Fundies into taking on NZ Govt Bonds, rate capped to 2-3% below the inflation rate, thus giving a negative real rate of return.
I don't mind being called a "plonker from academia" but I can tell from PM's comments that he hasn't read the full paper. He can find it here:
http://docs.business.auckland.ac.nz/Doc/PC-2012-1-KiwiSaver-changing-the-default-provider-regime.pdf
And, while I do get fees from being an external director of SuperLife Trustee, those fees will be the same whether SuperLife KiwiSaver becomes a default scheme or not; whether KiwiSaver survives or not. And anyway, I would have thought the arguments in the paper might be of sufficient interest to see the whole thing before sounding off.
BTW, I thought (and think) KiwiSaver was a solution looking for a problem to solve. I used to think that when I was a paid-up member of the financial services industry and now, like PM, in retirement and indulging the odd public policy hobby.
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