• Jenny Shipley
State Services

"New Zealanders must send a clear message on the proposed compulsory retirement savings (RSS) in September," State Services Minister Jenny Shipley said today.

Speaking at a function in the Albany electorate, Mrs Shipley said that if the country is to avoid uncertainty and frustration similar to that following the MMP referendum, then New Zealanders must leave all politicians in no doubt about their view.

"Voters can expect to see a concerted effort from some funds managers in coming weeks promoting the RSS. Voters should be wary about whose best interests are being served.

"People who have any anxiety at all about the proposed compulsory retirement savings scheme should post their ballot paper back with a NO vote.

Mrs Shipley said independent referendum panel chairman Sir John Robertson had been quoted as saying people were "very anxious" about what would happen to their compulsory savings, because they were not acquainted with the services provided by funds managers or annuity providers.

Mrs Shipley says she's strongly of the view that people should have the right to make their own choices about what to do with their savings.

"For many New Zealanders, having to save eight per cent of their income will leave them struggling to get by. To then force those people to invest their money in a way they don't feel comfortable with, is quite wrong.

"If people are anxious about the services provided by funds managers, they should not be obliged to use them.

Mrs Shipley repeated her concern about the administrative costs of the scheme.

"Compulsory saving will line the pockets of funds managers without necessarily increasing savings overall. At least three per cent of every person's savings will be taken by the funds managers and annuity providers, to cover administrative costs and as profit.

"The RSS will add costs in at least seven ways - the compliance cost for employers, the cost to IRD of collecting savings contributions, the cost of transferring that to a funds manager, the management fees, the cost of Government registration and monitoring of funds managers, the cost of transferring the money to an annuity provider, and the annuity provider's management fee.

"The proposed compulsory RSS is inefficient and costly. Even the independent referendum panel admits there is some confusion. Unless people are certain about what they're letting themselves in for, they should vote NO in September.

" Whatever their decision, New Zealanders must vote in large numbers. A low response will be a disaster, while a high response will send a message that can't be ignored," Mrs Shipley concluded.