Employers that continue making KiwiSaver contributions to staff working past the age of 65 stand to become employers of choice for the growing older workforce, says Kiwi Wealth.
Employers are not currently required to make the minimum 3% employer contribution to their staff members' KiwiSaver accounts when they turn 65 (assuming the staff member has been in KiwiSaver for five years).
However, some employers opt to continue making the contributions, a move that Kiwi Wealth’s General Manager Customer, Product and Innovation, Joe Bishop, says can make them attractive to experienced current staff and older workers looking for new jobs.
“In much the same way that some employers offer staff certain perks and benefits – free or subsidised health insurance, for example – those that choose to continue making contributions to the KiwiSaver accounts of their staff after they turn 65 will be very appealing.
“It’s likely older Kiwis, many of whom want to work beyond 65, will prefer employers that voluntarily make contributions as a policy.”
With unemployment in New Zealand at a 10-year low and many sectors facing a shortage of qualified and experienced people, appealing to older staff makes good business sense, says Mr Bishop.
“And it’s a mutually beneficial situation – older KiwiSaver members who are still working can continue to build their retirement savings while employers can retain experienced staff and reduce costs associated with staff turnover.”
Census figures from 2013 showed 129,513 people (22.1 percent) aged 65 and over were in full-time or part-time employment. This was up from 81,369 (16.8 percent) in 2006 and 49,935 (11.4 percent) in 2001.
“When the next set of Census figures are released, it’s possible those numbers will be significantly higher again,” says Mr Bishop.
“Some will be working because they don’t feel they have the financial security to retire, while others will continue working because they want to. There’s a societal shift happening and older people are a critical component of our national workforce and our economy.
“So it makes sense that employers who appeal to these older workers with additional staff benefits such as voluntary KiwiSaver contributions will retain good staff or have access to a larger number of experienced and capable workers.”
Kiwi Wealth is Kiwi Wealth Investments Limited Partnership, Kiwi Wealth Limited and Kiwi Investment Management Limited.
Kiwi Wealth Investments Limited Partnership manages investments for financial products and services offered by Kiwi Wealth, including the Kiwi Wealth KiwiSaver Scheme. Kiwi Wealth Limited is the issuer and manager of the Kiwi Wealth KiwiSaver Scheme.