Mercer's 2014 KiwiSaver Sentiment Index

Mercer's 2014 KiwiSaver Sentiment Index

New Zealanders facing a retirement reality check: Mercer’s 2014 KiwiSaver Sentiment Index

  • 20 May 2014
  • New Zealand, Auckland

More New Zealanders than ever before believe they will be less comfortable in retirement than they are now, yet only 21 per cent of men and 15 per cent of women have made plans for retirement according to new research released today by KiwiSaver provider Mercer.

Mercer’s 2014 KiwiSaver Sentiment Index, which provides insight into the attitudes working New Zealanders have towards KiwiSaver, has found 53% are not confident their savings will allow them to gain the retirement lifestyle they desire.

According to Mercer’s Index, the mean age New Zealanders want to retire at is 59, but New Zealanders expect they won’t be financially ready to retire until age 66.

“A retirement reality check is finally engaging the nation – we’re living longer and will require more money to retire with, if we want to maintain a comfortable lifestyle in our retirement years,” said Mercer’s New Zealand Managing Director, Martin Lewington.

Mercer’s Index also outlines an increase in support, participation, and confidence in knowledge of KiwiSaver. Ninety four per cent of New Zealanders believe KiwiSaver will be beneficial in helping them fund their retirement, up from 89% in 2009.

“The relationship between KiwiSaver providers and members is strengthening, with a significant increase in trust evident over the past few years. To continue to improve satisfaction and therefore retention, KiwiSaver providers should focus on delivering responsive service, quality educational material and tools, value for money and of course, competitive returns, in order to foster loyalty and satisfaction,” Mr Lewington said

More than half (66%) of respondents said they would primarily seek assistance from their KiwiSaver provider – with a shift towards seeking information from those viewed as experts in the field. This highlights the significant role KiwiSaver providers play in educating and advising members about their retirement savings.

“Employers should not underestimate the role they play in building the success of KiwiSaver and in improving the quality of New Zealanders’ retirement outcomes. Employers have a responsibility to contribute to their employee’s retirement savings, and need to work closely with KiwiSaver providers to ensure they have the tools and educational resources available to meet employees’ needs” said Mr Lewington.

Although positive sentiment around KiwiSaver is on the rise, the results also demonstrate there is still more work to be done.

Common concern among those who viewed KiwiSaver negatively centered around a lack of faith or trust in the government to ensure funds will be available during their retirement, suggesting there is still a moderate level of uncertainty and caution when it comes to saving for retirement through KiwiSaver.

Other key findings from the report include;

  • 94% believe KiwiSaver will be beneficial in helping them personally fund retirement

  • 71% of working New Zealanders rated KiwiSaver as a good, very good or excellent way to save for retirement

  • Only 20% rated their level of knowledge highly about retirement savings schemes and ways to save for retirement.

  • 52% expressed a desire to have a greater level of knowledge

  • 53% incorrectly believe if they change jobs their new employer will automatically start contributing to KiwiSaver on their behalf

  • 67% of survey participants claim to belong to a KiwiSaver scheme, an increase of 6% since 2012

  • 72% rated responsible investment options and 56% rated lifecycle investment options as important features

“If we want to build New Zealand’s retirement savings significantly, we must continue to build trust and interest in KiwiSaver, a sense of ownership by individuals, and continue to improve financial literacy initiatives,” said Mr Lewington.

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About Mercer

Mercer is a global leader in talent, health, retirement and investments. Mercer helps clients around the world advance the health, wealth and performance of their most vital asset – their people. Mercer’s 20,000 employees are based in 43 countries and the firm operates in over 140 countries. Mercer is a wholly owned subsidiary of Marsh & McLennan Companies (NYSE: MMC), a global team of professional services companies offering clients advice and solutions in the areas of risk, strategy and human capital. With 55,000 employees worldwide and annual revenue exceeding $12 billion, Marsh & McLennan Companies is also the parent company of Marsh, a global leader in insurance broking and risk management; Guy Carpenter, a global leader in providing risk and reinsurance intermediary services; and Oliver Wyman, a global leader in management consulting. Follow Mercer on Twitter @Mercer_NZ