Labour's election policy also includes banning new contracts that absorb employer contributions into salaries
New Zealand's Labour Party is planning to increase employers' KiwiSaver contributions to six per cent by 2032, as part of a series of proposed changes to the country's retirement scheme ahead of the general elections in November.
The changes, announced by Labour leader Chris Hipkins and finance and economy spokesperson Barbara Edmonds, would make employer contributions mandatory, including when employees reduce or pause their own contributions.
The changes are set to take effect from 1 July 2028.
Making KiwiSaver 'work better'
The announcement comes after the KiwiSaver default contribution rate rose to 3.5% in April, as part of a phased increase to four per cent by 2028. The current compulsory employer contribution stands at a minimum of 3.5% of an employee's gross salary or wages, unless the employee is on a temporary rate reduction, according to Inland Revenue.
Edmonds said the proposed changes aim to make the scheme "work better for the people," as she accused the ruling National Party of making it "harder for Kiwis to save."
"Labour will require employers to contribute at the same amount as National is proposing, but give workers more flexibility when money is tight," Edmonds said.
This will be done by setting employee contributions to a default four per cent while removing the minimum contribution rate, giving employees more flexibility to adjust as circumstances change.
The party's other proposed changes to the KiwiSaver include:
- Banning new total remuneration contracts that absorb employer KiwiSaver contributions into salaries.
- Extending employer contributions to workers over 65.
- Keeping KiwiSaver growing for parents while they're on paid parental leave.
- Exploring more flexible KiwiSaver options for self-employed New Zealanders.
"We'll also make KiwiSaver fairer for parents, older Kiwis and broaden who benefits — working with self-employed New Zealanders on more flexible ways to build their savings in the scheme," Edmonds said.
"We'll phase changes across our KiwiSaver policy carefully, giving workers and businesses certainty," she added.
