Originally Posted by
Zaphod
Overall Kiwisaver returns should be viewed over a long-term horizon. When doing so, the 50% return quoted shrinks back to a much lower overall rate of return. I have had staff members query why they were not seeing growth of (in the example provided) 50% in their accounts each year, as this is how the investment was sold to them by advisors and forums on the internet. Some believed we the employer, must be somehow conning them out of money.
The contributions do of course flow from the employee regardless of source whether that be holding salaries down to compensate additional costs, or in some cases the 3% contribution from the employer has been lawfully deducted from the gross employee salary.
Another bone of contention has been that the investment is also not guaranteed, which many I have found, do not understand and are dismayed when their balances decrease.
Cullen himself has advocated in papers released subsequent to his retirement from parliament, strongly for removing of tax breaks, any government contribution, and raised concerns about the ability to use the fund for purchasing property. I doubt Labour in its current form will attempt such reform.
The decision to join KS is nuanced, however for the average person without investment acumen, and given the current environment, I would agree it is probably a good idea.