Matt McPherson

For those people who are, potentially affordability is the reason that they are not contributing today.

And that's why I think there are other things that can be looked at, such as decoupling the incentive link between employee and employer contributions.

At the moment, I think people are opting out of KiwiSaver, at least to some degree, because of the affordability.

And with that, they are sort of double penalised in that they also lose the employer's contribution.

So we'd like to see those two things decoupled.

But if I'm in KiwiSaver and I'm in employment, the benefit of my employer's contribution shouldn't be subject to the affordability of my employee contribution.

And I think, again, we're just leaving people behind who are the very people

for whom increasing contributions would have an even bigger impact.

That's the idea.

Yeah, look, the idea on compulsion that we find the best balance is a rising floor of compulsion.

And that being at the time I get my first job, whether that's when I'm 15 or I'm 25, I'm enrolled into KiwiSaver at that point and I can no longer opt out.

I think the argument typically has been,

You know, you've got a 55-year-old, maybe a mother returning to work.

Why does she have to give up when she's actually already made decisions earlier on in life about how she's going to fund her retirement?

I think that's really sound.

But I think this rising floor is a way of achieving compulsion over time in a way that isn't forcing people's decision later on in life who've already made plans.

Look, that 40% isn't wholly people who have opted out for affordability.

There's a whole range of reasons that people have opted out, including total rent packages.

which almost half of employers in New Zealand offer today and I think are risking actually the integrity of KiwiSaver and also risking short-changing their employees, especially as contributions are going up, mandated contributions.

But yeah, a whole range in there.