Quote Originally Posted by SBQ View Post
The author's can pick the timeline to suit what every spin they want, also I would question where that SeekingAlpha link gets it's data from as their chart doesn't seem to reflect what I posted.

The employer matching of contributions is not always double. The minimum is 3% of person's income and the employer doesn't have to match any higher if the employee chooses to contribute more (up to 8% - a far cry from 18% that Canada allows).

My notion is at the minimum, the 3% matching contributions can easily be eaten up by the fund's mgt fees and this you lose out on compounding returns. More importantly, contributions only come if you're employed. What does that leave to those with disabilities or on the benefit? This is why I wonder if the NZ gov't would of been better to boost their superannuation pension fund by directly buying the S&P500 index so that everyone will see the benefit at retirement. Not just those that are able to work.
Technically I agree, high fees could eat up the contributions. However, if I do a back of the envelope calculation of a 7% return without matching, versus a 6% return with employer matching (1% fee, so three times what I pay), the matched scenario wins until you get to 90 years from your first contribution. In reality, the matching far outweighs the cost of the fees. Even a 2% fee wins for 50 years.

As I said, I only contribute 3% as that is all that is matched. Savings above this go elsewhere. If the matching increased, I would put in more to maximise this

Fully agree the system is not well setup for those who don't earn much or don't work at all, but that doesn't change my response to the incentives.