The KiwiSaver scheme changes are projected to reduce crown expenses by $2.467 billion over the next four years.
Major revisions to the savings scheme, which were unveiled in this year’s budget, include reducing the government’s contribution from 50 cents to 25 cents for each dollar contributed, with the maximum payment capped at $260.72.
Also, those with annual earnings exceeding $180,000 are automatically excluded from receiving the government contribution under the new changes.
KiwiSaver contributions are now open to individuals aged 16 and 17.
The Treasury has confirmed that the total savings are projected for the period from the 2024/25 financial year through to the 2028/29 financial year.
According to a spokesman for Minister of Finance Nicola Willis, the forecasted $2.467 billion in savings over that period is solely attributed to the reduction in the government contribution to KiwiSaver.
The spokesman highlighted that although there are savings from reducing the Government’s KiwiSaver contribution, it’s important to recognise that both employer and employee contribution rates will increase.
“The overall impact of that is expected to be higher savings for everyday KiwiSaver investors,” the spokesman said.
“The Government also extended the KiwiSaver annual Government contribution (and employer matching) to 16- and 17-year-olds in the workforce, encouraging a lifelong savings habit to secure Kiwi futures.”