Taken from KiwiSaver website:

"The Government will give your employer up to $20 a week to help them meet the cost of making contributions, so in the first year it won't cost your employer anything if you earn less than $104,000 a year.

Initially, your employer's compulsory contributions must be on top of your regular pay. This applies despite any agreements your employer may have made before 13 December 2007. But after that date your employer can offset their contribution against pay movements, as long as this is negotiated in good faith."

Now in most cases, the only "negotiation" employers need to make is just to send a letter/memo around TELLING you about contribution changes.

This also means that if your pay goes up 3% every year, you only see 2% of that raise, as the other 1% is being "contributed" to your KiwiSaver, but because it's coming out of your payrise, YOU'RE the one contributing that 1% per year, NOT your employer.

And considering the rising price of living costs, petrol, food etc... I would think that you would want as much of your money going straight into your hand, wouldn't you?

Waikato University (yeah I know, try not to laugh) has done research that shows KiwiSaver will increase income inequality and mostly benefit the rich.

Now this is true. Take for example a property investor whose company makes many millions per year. He has a choice of paying the profits to himself as dividends or as salary (or a mixture of both). With inputted dividends it works out much the same eventually.

Now with KiwiSaver he has a real incentive to pay himself more in salary, due to the tax deductibility of the employer contribution.

You see if he pays himself $1 million a year, then he will put in $40,000 a year as the employer contribution. Now normally that would attract 39% tax, which would be $15,600. The millionaire has effectively just made $15,600 through reduced tax, thanks to KiwiSaver. They also get the $2,040 of government subsidies also.

So Dr Cullen has given CEOs who earn $1 million a year a $17,640 tax reduction.
People should remember this if he ever attacks actual tax cuts as favouring the rich.

It is undeniable it helps the rich by far the most. And they will be the ones that are already saving, so it may not increase the levels of savings but just restructure their current savings to take advantage of the tax credits and deductions.

Ask yourself this: Are you really going to benefit from KiwiSaver?