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Proposed KiwiSaver changes Bill

Published 12 Nov 2023

Employment Relations (Protection for KiwiSaver Members) Amendment Bill is open for public submissions. Labour MP Tracey McLellan seeks to stop a 'Total Remuneration Package' approach for parties in the employment relationship.

Currently, under law the parties may agree that the Employer's contribution (minimum 3%) to the Employee's KiwiSaver is covered by the agreed remuneration structure in place. Namely, the Employer effectively does not pay the extra 3%  KiwiSaver contribution on top of remuneration payments, but rather this is passed on to the Employee to pay.

Some commentators argue that since the detail of total remuneration arrangements contained in the fine print of an Employment Agreement, there is a very real possibility that the employee may not understand or necessarily agree with their implications.

The Bill in question seeks to reinstate "crucial financial safeguards" provided to KiwiSaver members under the Employment Relations Act 2000 and to prevent discrimination against workers based on their affiliation with a KiwiSaver scheme or a compliant superannuation fund.

Presently, Employers are not bound by law to offer KiwiSaver-enrolled workers equivalent terms of employment, salaries, wages, working conditions, fringe benefits, or opportunities for training, promotions, and transfers as non-enrolled workers. This flexibility arguably has the potential to place New Zealanders saving for retirement at a disadvantage, subjecting KiwiSaver members to potential bias due to their membership status, resulting in potentially reduced protections compared to non-members. This bill endeavours to establish a more equitable employment relations framework for KiwiSaver members, aligning their conditions with those who are not part of the scheme.

You would be forgiven for thinking there is a somewhat deja-vu feeling with all this, and you'd be right. the National Party specifically added this flexibility with the Employment Relations Amendment Act 2008. Surprisingly enough however, the first reading in Parliament has passed by 109 to 10 votes all the noes coming from Act this time round, so providing nothing changes it's likely the 'Total Remuneration Package' approach will be repealed, and Employers will be required to demonstrate a KiwiSaver Employer contribution being paid on top of an Employee's salary or wages.

This, if enacted, could overnight introduce a significant increase for Employers who currently have this approach agreed to in their Employment Agreements with their Employees.