Few Ready for KiwiSaver

Few Firms Ready As Kiwisaver Looms

Only a fraction of businesses are prepared for the Government's KiwiSaver retirement savings scheme which kicks off in four months, leaving business groups warning of a compliance "train smash" ahead.

A survey of Canterbury Employers' Chamber of Commerce (CECC) members found that only 5 per cent were prepared for the workplace savings scheme which will be compulsory for them to administer.

While Canterbury employers look woefully underprepared, Business New Zealand said the situation was the same around the country where most businesses had heard of KiwiSaver, but few understood what the implications were likely to be.

KiwiSaver, aimed at boosting New Zealand's low retirement savings rate, will be compulsory for all new employees from July 2007, and the burden of compliance falls on employers.

Employers can gain an exemption if they already have a registered superannuation scheme that meets several requirements, but the reality is KiwiSaver will be a big compliance requirement for most businesses.

CECC chief executive Peter Townsend said the survey found "almost no-one" was prepared.

"It's just not on people's dials and it is not far away."

A spokesman for Finance Minister Michael Cullen said there was no reason for concern.

"There's plenty of time before July. There's an information campaign coming up, including nationwide advertising. I don't think it's a story."

But Business New Zealand chief executive Phil O'Reilly said the level of awareness nationwide was likely to be around the 5 per cent reported in Canterbury, and possibly less.

"Typically, larger businesses will be prepared or getting prepared. But the vast majority of small and medium-sized enterprises will have done no or little work on it.

O'Reilly said the success of KiwiSaver would depend on business.

"To make this successful they need to retain the faith and support of employers. If they don't invest significant time and effort in getting people prepared they risk facing a compliance nightmare."

He said it was good to hear that a publicity campaign was on its way.

"If businesses don't get good and timely information out you are going to have a train smash."

Among the decisions employers have to make are whether they will contribute to KiwiSaver as a way of attracting and retaining staff, which has both financial and industrial relations ramifications.

If they decide to simply administer the scheme there are still a lot of compliance requirements.