Government super increases to hit members
Employer contributions to the Government Superannuation Fund (GSF) are increasing significantly with effect from 1 July 2010, following the Actuarial Valuation of the scheme as at 30 June 2009 by the Government Actuary. This is bad news for those members who are paid under a total remuneration approach. These members are effectively paying the employer contribution out of their pay, meaning that as the employer contribution goes up the members’ take home pay goes down. The PSA is challenging employers who apply a total remuneration approach to GSF contributions and attempting to get a policy change before 1 July 2010. You can find a PSA briefing paper here.
Government cuts value of KiwiSaver
The PSA has written to prime minister John Key outlining our concerns to the changes to KiwiSaver.
Read here
State Sector Retirement Savings Scheme
The State Sector Retirement Savings Scheme was closed off to new members from 1 April 2008.
Existing members will be able to continue as members or may choose to move to KiwiSaver.
New employees will be automatically enrolled in KiwiSaver. Employer contributions are centrally funded.
PSA strategy
The PSA will seek agreements to enable members to join at a 2% contribution rate and receive a 2% employer contribution from 1 April 2008.
Members in the wider state sector including health and crown research institutes
KiwiSaver is available now. Employer contributions of 1% became effective from 1 April 2008.
Employer contributions are centrally funded.
PSA strategy
The PSA will seek agreements to enable members to join at a 2% contribution rate and receive a 2% employer contribution from 1 April 2008. The funding arrangements may have implications for existing schemes.
Members in local government, NGO sector and private sector
KiwiSaver is available now. Employer contributions of 1% became effective from 1 April 2008.
There is no central funding for employer contributions, meaning that there will be pressure for wage trade-offs after 2009.
PSA strategy
The PSA will seek agreements to enable members to join at a 2% contribution rate and receive a 2% employer contribution from 1 April 2008.