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Air New Zealand said today it would continue to match employee contributions of up to 4% to KiwiSaver, despite Government changes to the programme that will halve the compulsory employer contribution.
Air New Zealand was one of the first companies to immediately commit to a 4% contribution match, to encourage its 11,000 staff to join up to the retirement savings plan.
Group General Manager People Vanessa Stoddart said today the removal of the employer tax credit from 1 April next year would cost Air New Zealand $4.5 million a year.
However, employees needed stability in the scheme to allow them to plan their retirement savings with confidence, she said.
“Despite the Government this week reducing the maximum compulsory company contribution to 2%, Air New Zealand remains committed to matching employees’ contributions of up to 4% to KiwiSaver.”
While Air New Zealand supported the Government’s moves to make KiwiSaver more affordable for low income earners by reducing the minimum contribution rate to 2%, “from a retirement savings philosophy, Air New Zealand is concerned that the new level of 2% will become the ‘de facto’ savings level for many New Zealanders – a savings level that may provide an inadequate level of income in retirement,” Ms Stoddart said.
“We would like to see the tax exemption on employer contributions restored to 4%, to encourage more employees and employers to maintain their contribution at this higher level.”
More than 4000 Air New Zealand staff have already signed up as KiwiSaver members, increasing the percentage of staff participating in company retirement saving schemes from 50% to more than 70%.