Labour Pledges Steeper Employer Contributions for KiwiSaver

New Zealand's Labour Party has announced plans to boost KiwiSaver employer contributions if it wins the upcoming November election. According to Labour, mandatory employer contributions would start in July 2028 and increase to 6% of an employee's pay by 2032. This move is part of Labour's plan to create a 'bigger, steadier' KiwiSaver scheme.

Labour also wants to set the default saver rate at 4% and outlaw total remuneration contracts that hide KiwiSaver payments in base salaries rather than paying them on top. This proposal is in contrast to National Party's plan, which would make employer contributions mandatory but with a slower increase to 6%. Under Labour's plan, contribution rates would rise by 0.5 percentage points annually from 2029 until hitting 6%.

Labour's finance and economy spokesperson Barbara Edmonds said that 'stronger KiwiSaver means more wealth in Kiwi hands and more investment here at home.' The policy shift is likely to have a significant impact on retirement savings and household wealth, which are key concerns for the Labour Party. With minimum contributions already set to lift to 4% in April 2028 for both workers and employers, Labour's plan would take it further by locking in compulsory employer payments.