Murray Harris: Milford Asset Management, KiwiSaver Head supports Government's Kiwisaver pledge - but wants more details

A promise to increase Kiwisaver rates is being described as a fundamentally good move - even if there's more to do. 

National says it will lift default contributions to six percent by 2032 - matching Australia's 12-percent superannuation rate. 

Employer contributions would increase by half a percent each year - but not until 2029.

Milford Asset Management's KiwiSaver Head Murray Harris told Mike Hosking that although he backs the idea, 'we need to see what the long-term strategic plan for KiwiSaver is.'

LISTEN ABOVE

See omnystudio.com/listener for privacy information.

Episode Transcript

Speaker 1 (00:00):
So the NAT's are out with policy for next year's vote.
They're looking to bump super contributions to twelve percent a match.
Australia contributions would rise to six percent apiece between employer
and employee. The increase would come in at half a
percent a year from twenty twenty nine. Murray Harris is
the head of key We Saber at Milford Asset Management
and is with us. Murray, Good morning, morning Mike. If
you were running the world, would you do this?

Speaker 2 (00:21):
Oh? Yeah, Look, fundamentally it's a very good move, well
for New Zealanders. I don't know about the rest of
the world, but it means that New Zealanders are going
to be better set up for retirement. I mean, qv
SAB has been. It's hugely successful. There's three point three
million kiwis in it and one hundred and twenty billion saved.
But for the eighteen years it's been operating, the issue
that we've had is contribution rates have been far too low.

(00:43):
So New Zealanders are not going to enjoy the retirements
that they dream of.

Speaker 1 (00:46):
How do you guarantee if you can six percent from
your employer that isn't simply shaved off your pay.

Speaker 2 (00:54):
Yeah, well this is where some of the policy settings
need to be worked through, and you know, fund out mentally,
this is a good announcement, but there's a lot of
other moving parts with kivsaver, and I think what we
need to see is what's the long term strategic plan
for kV saver and what are the settings that are
going to be set for the long term future because
at the moment you do have this thing called total

(01:15):
compensation where your employer can pay you out of your
pay their employer contribution. Now that should be scrapped. That's
another one of the settings that National haven't announced included
in this announcement, and as there are others as well,
that we need New Zealanders to be really confident that
kivsaver is going to be set for the future. There
isn't going to be tinkering with it every time we

(01:36):
get a change in political party, and that they can
be confident that their long term savings and retirement savings
for the future are going to be as they expect.

Speaker 1 (01:45):
And if you can't take it out of pay or
guarantee it doesn't come out of a pay, what's the
impact on the economy as that goes to somewhere else
other than nol leaming or a power bill.

Speaker 2 (01:55):
Yeah. Well, look, ultimately Kiwi's saving war is going to
be better. And you know even for employers, I mean
the employers we speak to, and I know there's been
research done with the Financial Services Council with employers. They
think the changes to the kevsaver settings that we saw
in the budget are positive. I think these would be
positive changes in the eyes of employers, which is and

(02:17):
they can plan for it, which is why we've got
a seven year runway because ultimately, employees want their staff
to do well. They want them to earn well, they
want them to retire well. And more money in kV
saving means more money to invest in the economy, so
the economy does better and things like infrastructure, which we
badly need, can be funded from retirement savings like they
are in Australia.

Speaker 1 (02:36):
Good stuff, Well done, Murray Harris. God that was a
positive first positive reaction I've heard. All I've heard is am,
what happens there for your act? It's just like jeez anyway,
Murray Harris, head of keevsab at Milford Asset

Speaker 2 (02:48):
For more from the mic Asking Breakfast listen live to
news talks there'd be from six am weekdays, or follow
the podcast on iHeartRadio