Hypocrisy

April 2nd, 2013 at 1:00 pm by David Farrar

Radio NZ reports:

Budgeting services and opposition parties say struggling workers will be hit hard by increased costs that came into effect on 1 April.

Minimum contributions rose from 2% to 3% …

The and Green parties say some workers already struggling financially may choose to opt out of KiwiSaver rather than make the higher payments.

Again, such hypocrisy. Labour not only bitterly complained about National dropping the minimum contribution from 4% to 2%, they also have a policy of making KiwiSaver compulsory so struggling workers get no choice about contributing!

Would be nice if the media reported their policies, not just their releases!

 

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30 Responses to “Hypocrisy”

  1. dime (9,675 comments) says:

    I heard Fenton on zb news last night banging on about this.

    Dime thought to himself – labour are against kiwisaver now? this doesnt seem right…

    basically john key could come out and say “we have cured all cancer. you just have to take this one pill that costs $9.95″. labours response – the pill is too big for the average worker to swallow. the price is a major barrier to all.

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  2. hmmokrightitis (1,572 comments) says:

    Agree dpf. Why cant churnalists do two things when they interview opposition MP’s:

    1. So, whats your policy position on this? and

    2. What would you do differently?

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  3. gazzmaniac (2,319 comments) says:

    I think that Kiwisaver should be compulsory, with an option for self managed Kiwisaver, like in Australia.
    While I don’t really like compulsion at all, it is comuplsory to pay for the current system of NZ Super but I very much doubt that people of my generation will see a dime of it. At least if the savings are in your own name, you will see a benefit from it when you retire.

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  4. Kimble (4,417 comments) says:

    In the current system, the current taxpayers pay for the retirement of the previous taxpayers. If in the future, each taxpayer will provide for their own retirement, there will need to be a point where one group of taxpayers does both; pays for their retirement and the retirement of the previous taxpayers.

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  5. Pete George (23,345 comments) says:

    hmmokrightitis – probably futile, have you heard any of Shearer’s responses to questions like that? Apart from “stop assets sales” and “hands on” he ums and ahs and really has no clue about what Labour would do instead.

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  6. dime (9,675 comments) says:

    Dimes issue with kiwisaver is i cant protect it from a relationship break up.

    So Dime put 100k into kiwisaver. Gets divorced. Cant get his kiwisaver but needs to chuck in another 50k cash to the settlement.

    screw that.

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  7. Kimble (4,417 comments) says:

    dime could save himself the hassle and contribute equally to his own KiwiSaver and that of his chosen Life Partner.

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  8. dime (9,675 comments) says:

    kimble – we dont even live together yet. im not topping up her super!

    kiwisaver should be exempt IMHO

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  9. Elaycee (4,333 comments) says:

    DPF:

    Would be nice if the media reported their policies, not just their releases!

    You’d get better odds taking a photo of a pterodactyl flying down Queen Street.

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  10. Pete George (23,345 comments) says:

    That’s a good point on Kiwisaver if that’s how it is – and unless there’s a special exemption it must be. It’s complicated by the fact is that it’s locked in.

    Many people couldn’t afford to settle on half their Kiwisaver if they break up. I wonder if a Kiwisaver can be split in two into two accounts for a relationaship settlement?

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  11. Kimble (4,417 comments) says:

    I dont think it is included in your assets.

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  12. dime (9,675 comments) says:

    does anyone know for sure?

    i know some pilots who have come unstuck big time. 25 years away from claiming super and having to fork out now in a divorce

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  13. thedavincimode (6,590 comments) says:

    Get the dimelette into a pre-nup by explaining that it’s the physical dime that has attracted her and not the financial dime.

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  14. b1gdaddynz (279 comments) says:

    DPF “Would be nice if the media reported their policies” but then they would have nothing to write about!

    The Greens and Labours only policies seem to be if it’s National it’s bad; if you are poor and un-productive we’ll give you more free money if you vote for us! National are just mean we’ll just print more money for you it’s easy and you aren’t smart enough to know why it’s a bad idea! One of my sisters in law is a lovely lady but she doesn’t realise that she can only get a minimum wage job because she is unskilled, uneducated and has self imposed restrictions on where she will and won’t work; it’s just because John Key is evil and ruining the country! If you ask her for an example she doesn’t have one and seems to forget she was on a lower minimum wage when Labour was in; if you ask her which specific Labour/Green policies will improve her life she doesn’t know any but is 100% convinced she will suddenly be much better off!

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  15. dime (9,675 comments) says:

    do pre-nups actually work?

    i need to get my trust sorted.

    Dimes wealth is starting to grow at a tremendous speed. Im not greedy, but it took me 15 years to get where i am. i dont wanna hand over a nickel of my current cash!

    future cash is fine. half that. will be more than i have now anyway. but pre-relationship cash stays with dime :D

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  16. Grendel (972 comments) says:

    Well this is one budget adviser who is not criticising the change in KiwiSaver, for most low income earners, this is their one and only chance to ever have a house deposit, let alone retirement savings.

    KiwiSaver is an asset in your name, so it is liable for the accounting in a matrimonial split.

    i have had clients have to top up mortgages to payout half of other super funds, but not KiwiSaver (yet).

    its possible that with a ‘significant financial hardship’ claim, you could get access to half the funds to payout an ex, it would depend on whether the alternative puts you in significant financial hardship.

    i have not come across that one yet with my clients, done a heap of hardship claims, and mostly its down to bad choices on too much consumer debt (about 90% so far).

    Dime, you could always get a matrimonial property opt out agreement with your lady? even having the house in a trust can be no guarantee of it being safe. if she is ‘contributing’ to the property and mortgage etc, and the judge decides that you have the house in a trust primarily to avoid the matrimonial property act and its not ‘fair’ for her to get nothing, they can break up the trust.

    my advice as a financial planner, pay a good lawyer a lot to set it all up properly or be prepared to pay. problem with not using hookers is you end up paying anyway right :)

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  17. KevinH (1,160 comments) says:

    Currently I am contributing 4% towards Kiwisaver with my employer contributing 2%. Family in Australia who are in a similar scheme have advised me to lift my contributions to 9% to offset inflation and also in order to receive a more flexible payout on maturity, I am currently considering this and well may go in that direction.

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  18. dime (9,675 comments) says:

    Grendel – my buddy put his house in a trust and made sure his gf never contributed to the mortgage. she got nada. it still freaks me out.

    infact, the laws need a major over haul. we still treat women like its the 1950′s when it comes to divorce.

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  19. Grendel (972 comments) says:

    Kevin, currently the max employee contribution is 8% via wages, but you can always set up a DD with your provider to cover the rest.

    rather than just rushing out to put in more money, why dont you do a retirement needs analysis, and work out what you want/need in retirement and from there you can workout what you need to up your contributions by. its likely more than 9% and you may need to lift your contributions over time, if you are paying a mortgage etc right now.

    it does surprise me somewhat that the people i am doing financial plans with who are retiring now, never ever checked to see if they were doing enough, they just put money aside. so a key part of the plan is them waiting to find out if they did enough, at the point its too late.

    also an interesting observation, so far every client who has purchased property as an investment has less money overall than those who just relied on super. not that there is anything wrong with property, just that so many buy the wrong property, or get sold by a shark, and then dont manage it properly, or sell too soon.

    Dime, the laws are scary, i am very glad my exwife is really really mellow and did not want to take half my business. i have seen some people take an absolute bath on it all. imagine working 60 hour weeks for 20 years and then having to give someone who stayed at home to spend your money half of it!

    the law is very much in favour of her, especially if there are kids. the opt out laws are pretty good though, as long as you manage the seperation in money well, sounds like your mate got the right advice, thats exactly the advice i tell clients to get from a lawyer (i cannot give it myself as i am not a lawyer, so i just tell clients what to ask the lawyer).

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  20. dime (9,675 comments) says:

    “the opt out laws are pretty good though” – i have never heard of such things!

    so i could have an opt out clause on my glorious house?

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  21. Grendel (972 comments) says:

    its essentially the NZ version of a prenup.

    when you have been living together for 2 (or maybe 3, i always forget) years, you are basically married as far as property and assets goes and the general rule is 50% split (unless its considered ‘unfair’ to do so).

    this law covers everyone, so the only way around it is to ‘opt out’ by signing a matrimonial property opt out agreement.

    So as i said, like a pre-nup – but without needing the nup.

    now there may be fishhooks etc, but thats what a good lawyer is for. i cannot advise on this as i am not a lawyer but i have sent many young people with actual assets off to see their lawyer to put a fence around it so the new partner cannot take half of it.

    my new lady and i will be doing the same when we move in together, she has already paid out to make an ex go away and i got luck and only lost one house with my split :)

    good luck :)

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  22. gazzmaniac (2,319 comments) says:

    Australian Super is considered in the asset pool, but the lady can’t get it until she’s 65.

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  23. Pete George (23,345 comments) says:

    I went with KiwiSaver because the Government made an offer I couldn’t refuse, but their top up runs out fairly quickly. My main problem with Kiwisaver is you have to have all your funds in one place, not a good plan with investments.

    So I suggest considering an alternative investment if you want to build up more retirement savings.

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  24. b1gdaddynz (279 comments) says:

    I have Kiwi Saver at 4% at the moment and I also buy shares in the company I work for as we can buy as few as a single share a month with a buy 2 get 1 free award scheme; It’s starts to add up surprisingly quickly and it helps that the first 3 years of shares have doubled in value :-) “Work like you own the company”!!

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  25. nark (14 comments) says:

    Superannuation is most definitely included in a breakup under the Relationship Property Ac

    Yet another thing to thank Aunty Helen for?

    Also it covers de facto couples who have lived together in a de facto relationship for at least three years.

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  26. dime (9,675 comments) says:

    cheers Grendel!

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  27. Grendel (972 comments) says:

    No Probs Dime, no charge, just remember me when you next need mortgage finance, insurance or KiwiSaver :)

    PG, nothing wrong with diversification, but have a look at your KiwiSaver and you will see that they are invested extremely broadly (unless you are in a default fund, in which case stop), and will be invested with other fund managers, etc.

    the clients i am doing retirement plans with, who are about to start living off their super funds, for the most part had little to no choice where they invested, they were simply in their work super. not one of them was ever concerned about the lack of choice.

    so, yes diversify and do other investments, but dont go so crazy looking at diversification amongst providers that you miss the key thing, which is to invest as much as you can for as long as you can.

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  28. UglyTruth (4,551 comments) says:

    i need to get my trust sorted.

    Real property (land) for your kids. JMO

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  29. KevinH (1,160 comments) says:

    Thanks for the advice Grendel, I will give more consideration to my retirement needs but do feel that if I could afford to save a little more with Kiwisaver the better off I will be at 65. Cheers.

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  30. dishy (234 comments) says:

    Dime, and others: a search on Google (“Kiwisaver relationship property”) will lead one to the conclusion that one’s Kiwisaver account is treated, by law, as an asset to be divided up on a split. There is a logic to this, when you consider how matrimonial law works. It also seems that you can’t protect the account by using a trust, so a properly drawn up pre-nup / asset sharing agreement would appear to be the way to go. It would be worth getting professional financial and legal advice.

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