KiwiSaver changes are now in place

Changes to KiwiSaver have come into effect from 1 July. These changes are now live on Kiwimonster, and will be reflected in all the numbers you crunch.

Government contribution has been halved. Previously, for every $1 a KiwiSaver member contributes (up to a maximum of $1046.86) in a year, the Government put in 50c. The government contribution rate has now been halved to 25c for every $1 contributed, up to a maximum of $260.72 annually.

• High income earners no longer qualify for Government contribution. The Government contribution has been removed for KiwiSaver members with a taxable income over $180,000 per annum.

• KiwiSaver eligibility extended to 16- and 17-year-olds. The Government contribution and employer matching is now available to 16- and 17-year-olds in the workforce.

From next year, default contribution rates increasing. The default KiwiSaver employee and employer contribution rate will be moving from 3% of salary and wages to 3.5% on 1 April 2026, then to 4% on 1 April 2028. Employees will be able to opt to contribute at a lower 3% rate and have that lower rate matched by their employer. Contributions will be reset to the default rate after 12 months, but employees can choose to reselect the lower rate again.

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Changes to KiwiSaver announced by Government

The Government has announced a raft of changes to the KiwiSaver scheme, effective from 1 July 2025.

• Default contribution rates increasing. The default KiwiSaver employee and employer contribution rate will be moving from 3% of salary and wages to 3.5% on 1 April 2026, then to 4% on 1 April 2028. Employees will be able to opt to contribute at a lower 3% rate and have that lower rate matched by their employer. Contributions will be reset to the default rate after 12 months, but employees can choose to reselect the lower rate again.

• Government contribution has been halved. Currently, for every $1 a KiwiSaver member contributes (up to a maximum of $1046.86) in a year, the Government puts in 50c. The government contribution rate will be halved to 25c for every $1 contributed, up to a maximum of $260.72 annually.

• High income earners no longer qualify for Government contribution. The Government contribution will be removed for KiwiSaver members with a taxable income over $180,000 per annum.

• KiwiSaver eligibility extended to 16- and 17-year-olds. The Government contribution and employer matching will be extended to 16- and 17-year-olds in the workforce.

The Financial Services Council (FSC) has come out in support of the changes to increase the default contribution rate, and extend contributions to 16- and 17-year-olds. However, they have cautioned that the Government’s decision to reduce its contribution could disincentivise participation in the scheme, particularly for the self-employed. With 40% of members not actively contributing (for example, those on contributions holidays or people in irregular work), halving the government contribution makes it even less appealing for these members to start investing in KiwiSaver again.

Kiwimonster is evolving with KiwiSaver

We’re updating our tools to reflect the new KiwiSaver rules—including contribution increases and reduced government top-ups—so you can continue to deliver great advice, confidently.

While the new rules aim to increase participation, they don’t do enough to support the 40% of KiwiSaver members who aren’t actively contributing. That’s where Kiwimonster can help.

Even for those not currently contributing, Kiwimonster enables advisers to project future retirement outcomes. For example:

• Self-employed clients – whether or not they’re making regular contributions.

• People on a break – such as those on parental leave or overseas on their OE.

Using existing balances, advisers can still create meaningful forecasts—giving clients clarity, even if they’re pressing pause on contributions.

If you would like to find out how, give us a call.

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What does a business version of the healthy futures report mean?

We took a look at Southern Cross’s business edition of the 2024 Healthy Futures Report, which focuses on employee health and wellbeing. There are clear links between wealth and health, as the old saying has it. Whether one causes the other and in which direction the arrow of causality points is unexplored. We think it’s probably more complicated than this simple pairing of factors, although if someone becomes wealthy, they often become healthier. Likewise, if someone has the misfortune to become chronically ill, they usually get poorer. But these two are probably joined by other factors which may also have some power to affect outcomes – like education while young, health while a child, and current environment.

What employers can do to help is limited – but is appreciated by staff. At Quality Product Research Limited we offer seven of the eleven key suggestions made (soon to be expanded to eight) – we like that we can do that – but people use or do not use them pretty much as they please.

Key takeaways for us from the survey results:

• 89% of respondents said it was important to them to work for a company that supports the health and wellbeing of their staff.

• 55% of respondents’ employers were doing well in supporting their employees.

• The top ten initiatives employers could invest in were wellbeing leave (36%), lunch or break room (29%), flu vaccinations (26%), healthy food options (25%), activities promoting good mental health (23%), workplace massage (23%), Employee Assistance Programme (22%), health assessments (21%), subsidised membership to off-site facilities (21%) and stress management programmes (20%).

• 88% of employees think having a good work-life balance is important, with a third considering taking steps to improve their work-life balance.

• Making use of flexible working hours (43%) and switching off from work when finished for the day (43%) were the most common means of managing work-life balance. Conversely, having a high work load (60%), financial pressures (40%) and not having flexible working hours (40%) were cited as most commonly as reasons for poor work-life balance.

• 51% of workplaces offer flexible working arrangements, down from 54% in 2022; 60% of employees make use of flexible working hours most weeks and an additional 26% utilise it sometimes.

• Only 45% of kiwis rate themselves as happy with their financial situation; 91% cite cost of living as one of their top concerns and 58% worry about not having enough money to support themselves or their families.

• 84% of New Zealanders are concerned about not having good, affordable access to healthcare, up 8% from 2022.

• Kiwis don’t feel they are getting enough sleep (60%) or exercise (62%).

• New Zealanders without health insurance were more likely to be less happy with their health, financial situation, mental wellbeing, fitness levels, weight of themselves and their children, exercised less on average and were more likely to be stressed.

Southern Cross highlight a series of initiatives workplaces could take to improve employee wellbeing, including:

• offering education on stress management and financial management;

• offering free fruit or healthy food in breakrooms;

• encouraging employees to make use of flexible working if it’s offered;

• offering health assessments;

• educating employees on the importance of flu vaccinations;

• offer opportunities for physical exercise, through work place team sports, sports day or subsidies for gyms or exercise equipment;

• encouraging employees to take their annual leave;

• training leaders to identify those at risk of burn-out;

• offering wellbeing leave;

• providing employee assistance programmes and educating employees on what it is and hot to use it;

• offering subsidised health insurance.

1,463 employees were surveyed for this report in March 2024.

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Survey highlights increasing concerns among kiwi workers about their mental and physical health

The 2024 Workplace Wellbeing survey, conducted by nib New Zealand and the Employers and Manufacturers Association (EMA), has found that 80% of respondents have been negatively impacted by the current cost-of-living crisis.

• 64% are concerned for the mental health and wellbeing of their family

• 56% are worried about their own mental health and wellbeing

• 52% are concerned about the risk of burnout at work

• 50% said the rising cost of living has negatively impacted their mental health (rising to 63% of 16 – 30 year olds)

In more positive news, 61% said their workplace proactively manages wellbeing, up from 53% in 2022. Fewer employees are being impacted by understaffing (47% down from 64%), poor work-life balance (36%, down from 42%), and the pressure to work long hours (34%, down from 39%).

Kiwis are putting more value on systems that prioritise employee wellbeing, with 60% rating Employee Assistance Programmes (EAP) as important, and 72% valuing wellbeing initiatives and subsidies. The value of employer-provided insurance continues to grow, with 64% considering medical and health insurance a benefit they look for when switching jobs, up from 57% in 2022, 48% valuing income protection illness cover and 43% looking for life insurance benefits.

Rob Hennin, Chief Executive at nib New Zealand, said

“There’s no better time than now for employers to stand up and proactively support their teams’ mental and physical health, empowering them to perform at their best knowing there’s someone in their corner no matter what happens. Fostering this positive workplace culture starts from the top down, so it’s just as important for business leaders to embody these values in their day-to-day.”

The survey collected responses from 1,229 NZ workers this May.

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Should more employers be looking at offering more flexible working options?

Increasingly, organisations are seeing the benefits of offering more flexible working options, in terms of productivity output, being able to attract a more diverse range of employees and employee satisfaction.

Stats NZ data shows that in 2023, 81% of organisations offered flexible working hours, up from 57% of organisations in 2018. In 2023, 77% of organisations offered part-time work roles, up from 53% in 2018.

Kiwibank economist, Sabrina Delgado, highlighted flexible work’s impact on the wider economy,

“Whether it’s working around school hours or the location of work, greater work flexibility perhaps has the biggest economic impact on improving the labour market outcomes and productivity.”

Infometrics chief executive and principal economist Brad Olsen said,

“Increasing participation even further can be supported by removing barriers to work for different groups, like parents, while still allowing them to do their parental duties without as much compromise as before.”

Dr Ellen Ford, the creator of #workschoolhours movement, said,

“There are a huge amount of parents who would absolutely love to work in an organisation that provides a school hours framework and they would add immense value to the organisation.”

“One of the economic benefits is that it actually allows organisations to tap into a massively underutilised section of the workforce.”

“If businesses are struggling to attract and retain great talent, one of the ways they can do that is actually offer roles that work within school hours.”

“People on part time contracts are typically the most productive in the workforce. They just get their stuff done in a shorter amount of time.”

It seems like flexible work options are here to stay. An international survey of more than 500 CEO’s around hybrid working, found 91% had adopted hybrid working and 74% said a full-time office return is not a business priority. 73% of CEO’s agreed that hybrid work allows them to attract the best workers and 76% saw improved staff retention since offering flexibility to employees.

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Hays publish salary guide

Hays have published their Salary Guide for FY24/25. Of note, the extreme skills shortage is lessening yet there is a hesitancy for businesses to take on new hires, due to macro-economic conditions.

Their survey data highlights the importance of brand reputation; diversity, equity and inclusion policies; and environmental, social and governance strategies in attracting talent. Once an employee starts, team culture and job security are the biggest reasons an employee plans to stay with their employer. A huge 82% of employees said that team culture is the most important factor in their decision to stay with their current employer, and 64% said that continued remote or hybrid working was important. More than 77% of employees are currently looking or planning to look for a new job within the next 12 months, with the rising cost of living being the most cited reason (64%).

Currently, 97% of organisations offered a hybrid working model, with 74% not expecting their hybrid work offering to change in the year ahead. This tracks closely with employee wants, with 92% preferring a hybrid mode of working.

86% of organisations are planning on offering pay rises in the year ahead, though the value of the salary increases is dropping, at odds with employee expectations, with 61% of employees expecting an increase of more than 3%. 71% of employees stated that a pay rise was the most important factor to their career in the year ahead but benefits also featured highly in priorities – with learning and developing technical skills (63%) and being able to work flexibly (54%) being important to people.

The survey had 15,324 respondents across Australia and New Zealand, across both employers (6,461) and employees (8,863).

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2 Apr 2024 - Changes to ACC’s Accredited Employers Programme (AEP) aim to deliver a better experience for businesses and workers whose work injury claims are handled by the organisation directly, rather than through ACC. Accredited employers will be given better insights into their performance, more support and guidance to help them improve their worker’s experience as well as injured workers being better supported by their employers.
The changes focus on 4 areas:
Claims and injury management assessment: An improved assessment of the claims and injury management that also better captures workers’ experience and remove unnecessary compliance.
Performance monitoring: A new performance monitoring model that will give accredited employers access to clear and up-to-date information on their performance, the ability to lift performance, and incentives to perform better.
New health and safety assessments: An updated ACC health and safety audit process and a new option of ISO 45001 certification will drive higher quality health and safety systems.
Updated pricing options: More choices under the Partnership Discount Plan, enabling employers to take on longer claims management periods, providing workers with complex injuries greater assurance and more continuity of support.
The changes will take effect from 1 April 2025, with 1 years notice, so accredited employers and ACC have time to prepare and adapt their processes and systems.

https://www.mbie.govt.nz/about/news/final-changes-to-accs-accredited-employers-programme-confirmed/

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AXA report sheds light on concerning state of mental health and wellbeing at work globally

AXA’s latest Mind Health Report has found nearly a third of people worldwide suffer from a mental health condition.

The research was a collaborative effort between AXA and IPSOS, and surveyed 16,000 people across 16 countries in Europe, Asia and America, with a focus on mental health and wellbeing in the workforce.

The report found three in four employees were grappling with mental health issues attributable to their work environment, with respondents mentioning either tiredness, trouble sleeping or stress. Overall, 23% of employees had taken mental health-related sick leave, jumping to 38% of younger people. The Southern Cross Workplace Wellness Report uncovered similarly concerning findings around increased stress being experienced by workers.

Mental health support offered by employers is a key factor in employees choosing to stay with a company, with 62% of those aged 18 to 44 factoring it into their decision. More than half of respondents said company-driven mental health initiatives and benefits influence their engagement at work.

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Are kiwis taking more sickies?

The 2023 Workplace Wellness Report, a collaboration between Southern Cross Health Society and BusinessNZ, found a rising trend in staff using more of their sick leave entitlements.

The survey canvassed 137 organisations in the public and private sectors, who together employ a total of 135,742 people, 6.57% of all employees in New Zealand, about their employee absence data across 2022.

In July 2021 the statutory sick leave entitlement increased from five to ten days annually. Across 2022 employees took an average of 5.5 days off. This increased from the 4.2 to 4.7 days recorded between 2012 and 2020. It should be noted that 2020’s average of 4.2 days was the lowest, when lockdowns, social distancing and a nationwide focus on staying home when sick had a significant impact on results.  

Extrapolating figures from the survey to the national workforce, it translates to 10 million working days lost due to employee absence in 2022, up significantly from 2021’s 7.3 million estimate. Across the economy this equates to around $2.86 billion in absence costs.

The report cited the ongoing influence of Covid-19 and the encouragement to stay home when ill as one of the factors influencing 2022’s increased absence results. They found 2022’s mean result for the degree staff typically turned up for work with some form of illness when they should have stayed home was less than in 2018, 2016, 2014, and 2012 and an exact match for 2020. This bodes well that employees are putting more emphasis on taking care of themselves and limiting the spread of illness. The report also found that the proportion of enterprises who thought the culture of their business encouraged employees to stay home when ill has improved markedly since Covid-19 arrived, throughout all sizes of businesses.

However, they also note that ‘paid sickness absence days being viewed as an entitlement by those suspected to be not actually sick’ as risen up the ranking of main drivers of absence to reach number 7.

Anecdotally, people have been experiencing more sickness since lockdowns ceased than in years previous. Could this be part to blame for the increase in absences? Or is it simply that one of the lingering effects of living through a pandemic is a reluctance to come in to work when sick, when in the past employees would have just soldiered on?

Changing business demographics opens up opportunities for advisers

Stats NZ’s latest business demography statistics (as at February 2023) paints a promising picture of New Zealand’s economic landscape. With more new businesses and a rise in employment, opportunities abound for insurance advisers specialising in Business Risk Protection products.

Key highlights include:

·         The number of enterprises in NZ is following an upward trajectory, with 605,000 enterprises in February 2023, up 1.8% from February 2022. This is on top of a 5.3% increase in the year to February 2022.

·         The number of paid employees in these enterprises (not an official employment statistic) was 2.5 million, up 3% from February 2022.

·         These enterprises operated across 641,560 business locations, up 1.4% from February 2022.

There has been a marked increase in new businesses across a range of sectors, indicating a healthy and growing economy. The data also reveals a positive trend in employment, with employees in large enterprises up 5.9% from February 2022.  

Ministry of Business Innovation and Employment figures show 196,584 people entered NZ on work visas in the 12 months to September, up dramatically from 39,501 in the 12 months to September 2022. The arrival of these overseas workers further increases the pool of workers available and makes it much easier for employers to fill any vacancies.

Certain industries, such as construction; professional, scientific and technical services; and health care and social assistance industries, have shown significant growth. These sectors often have specialised insurance requirements, like protecting shareholder needs or covering key people within an organisation, providing a niche market for advisers.

Quality Product Research Ltd have recently completed independent research on Business Insurance lump-sum products, putting a wealth of information at advisers’ fingertips in order to make well-informed recommendations. With disability products soon to be included, advisers can offer a comprehensive suite of options to their clients.

Advicemonster has functionality that allows users to streamline the process of creating Business Statements of Advice (SOAs), speeding up the time spent on admin and freeing up more time to spend with clients. Please get in touch if you’d like a sample copy of a Business SOA. Advicemonster’s tools assist advisers in conducting a Fact Find and Needs Analysis and being able to offer highly personalised solutions.

The combination of up-to-date research and specialised tools allows advisers to educate new businesses on effective risk mitigation strategies. This is particularly crucial for sole traders and SMEs that may not yet be aware of the full range of risks they face.

To find out more about what Advicemonster can do for you, please contact Aneel Ravji on 0212160905 or ask us about our next online training sessions.