The compliance costs of the KiwiSaver scheme

Sue Yong
Auckland University of Technology
New Zealand

Noel Cox
Auckland University of Technology
New Zealand

Abstract:
The New Zealand KiwiSaver scheme is a work-based retirement scheme, an individualised savings account managed by the private investment providers. KiwiSaver will cost taxpayers an estimated $3 billion over four years beginning 1 July 2007. The cost includes hiring of additional Inland Revenue Department (IRD) staff, and administration and financial incentives granted to employees and employers. Employers, IRD and the investment providers will absorb the increased ongoing administration costs. The long-term survival of the scheme is dependent on the costs of the scheme, for taxpayers, Government, employees and employers, being manageable.