People will be automatically enrolled in KiwiSaver under changes being considered by the Government.

All workers would be automatically signed-up to the retirement scheme under the change, unless they asked to opt-out.

National had previously considered such a move, but ruled it out as too expensive.

Finance Minister Bill English said that mass enrolment was now more affordable in the wake of the Government’s snap decision to drop the $1000 kickstart, announced as part of Budget 2015.

However, the move would still carry significant cost and it is unclear when it might be implemented, if at all.

In 2015/16, the Government is forecast to spend $705 million on the KiwiSaver Member Tax Credit.

Before the last election National promised a one-off mass compulsory enrolment when the Government’s books were back in surplus.

The Budget estimates that the current year will post a $684 million deficit, and forecasts a tiny surplus of $176 million for 2015 – 16, rising to $1.47 billion in 2016 – 17, $1.99 billion the next year.

“We are keen on this mass auto-enrolment. That is auto-enrolling everyone who is not in the scheme so that they then have the opportunity to opt-out,” Mr English told Radio New Zealand.

“It would catch a whole lot of people who might want to reconsider being in KiwiSaver, because it is a pretty good deal – they get the employer matching subsidy, and the government subsidy.

“There is really no other investment they can make – or no other form of savings – that can match the return of KiwiSaver.”

Mr English said the proposal would be examined in the next six to 12 months.

Labour and the Greens have attacked the decision to drop the kickstart payments, saying National has undermined KiwiSaver since it came to power.

Grant Robertson, Labour’s finance spokesman, has said the party would reinstate the payments.

Ditching kickstart was forecast to save the Government $500 million over four years.

Reference: http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11456627