Government urged to consider making employer contributions for older workers compulsory
Westpac New Zealand is calling on employers to continue making KiwiSaver contributions for employees aged 65 and above as working lives continue to get longer.
Nigel Jackson, Chief Executive of BT Funds Management (NZ) Ltd, Westpac NZ’s KiwiSaver Scheme provider, said continuing employer contributions will make a difference to people's retirement savings.
In New Zealand, KiwiSaver contributions from employers and the government stop at the age of 65.
Jackson said it makes sense for government contributions to end at 65 as older workers start receiving superannuation payments from this age.
However, continuing employer contributions would boost people's KiwiSaver balances in the critical last years of working, he pointed out.
"We also think there is a fairness element. Workers over 65 doing the same work as younger workers should get the same benefits," Jackson said in a statement.
Longer working lives
The chief executive made the remarks as Stats NZ this year revealed that the proportion of older people in employment has been steadily increasing.
Labour force data also showed that seven per cent of workers in New Zealand were aged 65 and above in 2024, with projections expecting the figure to increase to between seven and 11% by 2051.
Jackson said 54% of KiwiSaver customers aged 65 and over have continued to make contributions to their accounts.
"But just one-third of this age group have received employer contributions in that time," he said.
"With close to a quarter of our population aged over 65 still working, in many cases because they simply can't afford to retire, there's an opportunity to support these people with their savings."
Westpac NZ also urged the government to consider making employer contributions for older workers compulsory, after its previous research showed anxiety among New Zealanders on retirement savings.
More than six in 10 respondents said they don't think they're saving enough. Among the respondents, 70% also felt KiwiSaver should be compulsory, while 68% believe employers should hike contribution rates.
