Kiwis are happy about a landmark pension law that will give them more money to invest in their own retirement.
Key points:New Zealanders have been voting for a $1.5tn national pension since the 1980s, and it will be one of the most expensive in the worldThe New Zealand Government says it will spend $1bn a year on retirement support for workers in the 2018-19 financial yearNew Zealand has the world’s biggest private-sector pension system, with more than $1tn in assetsThe law will increase workers’ retirement contributions to a maximum of $1,250 per year, but it is estimated that some of the increase will be paid out in benefits.
Under the new law, workers will be able to save up to $300,000 a year in their retirement accounts, a significant increase on the $200,000 currently paid to people.
The law also gives New Zealand workers more choices about the amount of their pension, with a range of options available for people to choose from.
It means that the Government will not be able force people to contribute to their pensions at the same rate as other workers.
Instead, workers can invest their savings in any asset they want.
The increase will bring the total amount of investment-based pension funds in New Zealand to $1 billion.
It will be the most costly in the financial services industry, with the World Bank estimating that the cost will be $1 trillion, and that the amount will rise to $2 trillion by 2021.
The Government has already spent $1 million on the new legislation, with $1m being spent by the Treasury and $200 million by the NZPensions Department.
In a statement, Minister of Finance David Parker said it was “another important step forward” in the Government’s efforts to provide Kiwis with a better retirement.
“I believe it is time to invest the savings in a better way for our workers,” he said.
“This reform will help to deliver better retirement security for New Zealand’s workers, while helping the economy grow and creating jobs.”
The reforms will also ensure that New Zealand can attract the best talent and keep our economy strong.
“New Zealand’s current private-employer pension system is one of Europe’s most expensive, costing taxpayers nearly $1trillion annually.
In 2017-18, the Government announced it would spend $300 million on a range the pension.
The reforms also include a new tax-free savings account to help fund retirement, with employers able to choose how much to contribute.
Mr Parker said the new scheme would help to pay for New Kiwis’ needs, and would help workers save more.”
A new public-sector investment fund is being set up in a bid to help New Zealand stay competitive and ensure we can attract and retain the best and brightest workers from around the world,” he added.”
We will be announcing details of the new fund later this year.
“Read more about New Zealand pension, retirement and investments: