Labour to make employer contributions to KiwiSaver compulsory if elected

Labour will make employer contributions to KiwiSaver compulsory, as well as raise the minimum to 6 percent even when employees reduce or pause their own, with the party saying it wants to make the retirement savings scheme "work harder for more New Zealanders".The party will also set the default employee rate at 4 percent, extend employer contributions to workers over 65, maintain contributions while parents are on parental leave, and ban new total remuneration contracts that absorb KiwiSaver contributions from employers into salaries, if elected.Labour leader Chris Hipkins said KiwiSaver was one the party's "proudest legacies", as he announced the policy at the Sharesies office in Wellington on Sunday."We created it, and now we're going to make it work better for people," Hipkins said.He said Labour was the party of KiwiSaver, and believed every New Zealander should have the opportunity to build a secure future."Sir Michael Cullen turned that belief into KiwiSaver, while National voted against it," Hipkins said, adding that under National "too many New Zealanders are struggling to pay the bills, let alone save for tomorrow".Hipkins referenced the 83,400 people who were currently on a savings suspension because times were tough, with more than a million working-age KiwiSaver members not contributing at all.New Zealand First and National were first off the blocks with KiwiSaver policies this year, both proposing automatic enrolment at birth and compulsory contributions from employees.Labour's finance spokesperson Barbara Edmonds said on Sunday National was making it harder for Kiwis to save and now wanted to "force" workers to put more in."Labour will require employers to contribute at the same amount as National is proposing but give workers more flexibility when money is tight."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."From 1 July 2028, employer contributions would become compulsory and extend to paid parental leave and workers over 65. The minimum contribution rate from employers would be lifted to 6 percent by 2032.Edmonds said the changes across Labour's KiwiSaver policy would be phased in carefully, "giving workers and businesses certainty".The full policy proposal looks to:Make employer contributions compulsory, and lift to 6 percent by 2032, including when employees reduce or pause their own contributions.Set the employee default at 4 percent, remove the minimum contribution rate, and give employees more flexibility to choose their rate as circumstances change.Ban new total remuneration contracts that absorb employer KiwiSaver contributions into salaries.Extend employer contributions to workers over 65.Keep KiwiSaver growing for parents while they're on paid parental leave.Explore more flexible KiwiSaver options for self-employed New Zealanders.The party explained that making the employer contribution compulsory and increasing the employer contribution to 6% over time would increase revenue from the Employer Superannuation Contribution Tax.It said that would help fund government contributions to paid parental leave recipients and meet the government's higher costs as an employer. That would be managed through the Budget process, the party added.