Ethnic pay gaps too are revealed
The Te Ara Ahunga Ora Retirement Commission’s new research, conducted by the New Zealand Policy Research Institute at AUT using Stats NZ’s Integrated Data Infrastructure (IDI), has revealed a 36% gap in KiwiSaver contributions between men and women, mainly due to the gender pay gap.
Equal contribution rates, unequal outcomes
Despite men and women contributing an equal percentage of their salaries to KiwiSaver, the difference in their actual dollar contributions is substantial.
Retirement Commissioner Jane Wrightson (pictured above left) stressed the need for employers to reassess their KiwiSaver policies to encourage equitable savings.
“At the moment we’re not seeing employers show the initiative we’d hope to see,” Wrightson said. “Unfortunately, less than 10% of employers contribute more than the compulsory 3%.”
She urged a shift towards more supportive employer contributions to KiwiSaver, highlighting the importance of enabling all New Zealanders to save adequately for retirement. She called for a proactive approach from employers to address these disparities and ensure a secure retirement for all employees.
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Deep dive into pay gaps
Michelle Reyers (pictured above right), Te Ara Ahunga Ora policy lead, pointed out the opportunity to delve into the underlying causes of these significant differences in contributions, especially across gender and ethnicity.
“It exposes some clear imbalances which tell us that if we don’t make changes, we are on a pathway to continue seeing the inequalities we are already seeing in our retired population for decades to come,” Reyers said.
Ethnic disparities in contributions
The study also shed light on the ethnic pay gaps reflected in KiwiSaver contributions, with Māori and Pacific Peoples contributing approximately $1,500 less annually compared to European counterparts. Despite this, Māori exhibited the second-highest average employee contribution rate among the ethnic groups studied.
Pay gaps and retirement preparedness
The data underscored the significant effect of gender and ethnic pay gaps on New Zealanders' ability to prepare for retirement, particularly affecting Māori, Pacific Peoples, and women, who are more likely to rely on NZ Super due to lower savings.
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