Abstract
ABSTRACTThe objective of this paper is to analyse the extent to which membership of KiwiSaver has been associated with greater accumulations of net wealth. The paper utilises two linked sources of data which cover the period 2002–2010: Statistics New Zealand's Survey of Family, Income and Employment and Inland Revenue Department administrative data on KiwiSaver membership. Two approaches are employed: difference-in-differences (where the outcomes of interest are changes in net wealth) and various panel regression techniques. Results appear consistent with earlier evaluations of KiwiSaver. Neither approach suggests KiwiSaver membership has been associated with any positive effect on net wealth accumulation.
Highlights
KiwiSaver1 is a voluntary savings scheme aimed at increasing the retirement wealth of a target population
Its introduction in 2007 was prompted by a view that household saving in general appeared to be low and declining, and that there may be some who would reach retirement with an accumulation insufficient to allow them to sustain their preretirement standard of living
In an attempt to hold some of the other factors likely to affect net wealth accumulation constant, the difference in difference (DiD) analysis was repeated by age, gender, education, income, wealth, partner and home ownership status
Summary
KiwiSaver is a voluntary savings scheme aimed at increasing the retirement wealth of a target population. Its introduction in 2007 was prompted by a view that household saving in general appeared to be low and declining, and in particular, there may be some who would reach retirement with an accumulation insufficient to allow them to sustain their preretirement standard of living (see for example, Treasury, 2007). Law, Meehan and Scobie (2011) evaluate the performance of KiwiSaver in terms of four key dimensions. Approximately 1/3 of contributions to KiwiSaver represented new savings, while 2/3 would have resulted anyway in the absence of the scheme; 2. In terms of standard measures of programme efficacy (target effectiveness and leakage) KiwiSaver was found to have performed poorly, with leakage to the nontarget group estimated to be 93%; and The key findings of the study were that: 1. approximately 1/3 of contributions to KiwiSaver represented new savings, while 2/3 would have resulted anyway in the absence of the scheme; 2. no association was found between KiwiSaver membership and expected retirement income outcomes; 3. in terms of standard measures of programme efficacy (target effectiveness and leakage) KiwiSaver was found to have performed poorly, with leakage to the nontarget group estimated to be 93%; and
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