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Speaker 1: Nationals dropped its first election promise it wants to lift

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Speaker 1: the default key we save a rate to twelve percent

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Speaker 1: by twenty thirty two to match the Aussies. Employer contributions

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Speaker 1: were jumped to six percent, increasing by half a percent

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Speaker 1: each year, but not until twenty twenty nine. Claire Matthews

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Speaker 1: is Associate Professor, Massa University Business School. Claire, good morning, Good.

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Speaker 2: Morning, Ryan, good thing. Well, yes and no, yes, it's

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Speaker 2: good to see key we save rates rise, but to

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Speaker 2: see it done in this way is not necessarily the

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Speaker 2: best way.

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Speaker 1: What's wrong with this way?

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Speaker 2: It's a little bit piecemeal. We need to actually think

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Speaker 2: about can we save it in bigger terms and think

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Speaker 2: about actually, if we're going to make some changes, how

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Speaker 2: do we want it to log And yes, one of

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Speaker 2: those changes might be to the default rate, but that

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Speaker 2: should be part of a bigger picture, not a single change.

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Speaker 2: There are other changes that need to be made which

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Speaker 2: came out in the Retirement Commissioner's Report on the Review

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Speaker 2: of Retirement and come last week or the week before.

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Speaker 2: There's things like total remuneration contributions for over sixty five

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Speaker 2: year olds. Those are just a couple of things, but

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Speaker 2: it's looking at it in a bigger way. And the

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Speaker 2: other issue is that if people think it's too high,

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Speaker 2: because you're not compelled to be a member of key

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Speaker 2: we save, but they'll just say or to continue to contribute,

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Speaker 2: they'll just say I can't afford this, I'll put it

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Speaker 2: off hold, and therefore then they're not contributing anything, which

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Speaker 2: is actually a worse situation.

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Speaker 1: It's basically, choose your own adventure. You can choose to

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Speaker 1: be in it, it'll not be in it, and you can

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Speaker 1: choose which rate you go with. So what the total

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Speaker 1: remuneration issue has been raised with me before, so tell

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Speaker 1: me how this works. An employer will say, yeah, we

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Speaker 1: could do the at six percent rate and match your

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Speaker 1: six percent rate, or we could give you the money

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Speaker 1: now in hand.

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Speaker 2: Basically that's how it works. Yes, so instead of putting

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Speaker 2: it into your KEII savior, they say, we'll give it

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Speaker 2: to you, and then it's your responsibility to put it

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Speaker 2: into your kiwisaver or put it somewhere else. But you're

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Speaker 2: not actually going to get it as an extra to

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Speaker 2: your salary. It's put into your salary. There's fine for

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Speaker 2: some very high earning employees are your chief executives and

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Speaker 2: c suite people, But it's where it gets applied to everybody.

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Speaker 2: And CEOs isn't like have a bit more power in

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Speaker 2: terms of their relationship with their employer. But some employers

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Speaker 2: do this to people who really have no power in

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Speaker 2: their relationship and they've really got no choice but to

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Speaker 2: go along with it, even though it's not in their

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Speaker 2: best interest or what they want.

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Speaker 1: Does it not have the same in terms of financial outlay?

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Speaker 1: Would it be no different for the employer whether they're

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Speaker 1: paying into a KYP saver or giving them to them upfront.

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Speaker 2: Fundamentally, it shouldn't cost any difference.

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Speaker 1: Why would they do it?

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Speaker 2: Because it just makes it a lot easier. Instead of

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Speaker 2: having to worry about payments going here, there and everywhere,

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Speaker 2: they just have to worry about what amount to pay?

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Speaker 1: Gotcha? Claim Matthews, Massive University, Associate profession and Business School.

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Speaker 1: For more Familiarly edition with Ryan Bridge, listen live to

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Speaker 1: on iHeartRadio.