NEW ZEALAND - New Zealanders who rushed to join the KiwiSaver scheme may find recent market volatility hard to cope with, the country's retirement commissioner Diana Crossan has warned.
She said: "People are nervous. KiwiSaver was introduced at a time when things started to go down and so people who have never saved in their lives before and who don't understand the market will naturally be nervous.
"The fact people will have a look at their first year of KiwiSaver and see that they might have lost money will be a hard thing for many people to cope with. That is just going to make it harder for us."
Crossan said the Retirement Commission, which had a role in helping New Zealanders prepare financially for their retirement, would be working with the New Zealand Stock Exchange and Securities Commission on how it could help New Zealanders understand the market and recent fluctuations.
However, so far, stock market volatility has not deterred workers from joining the KiwiSaver Scheme, with 414,144 signed up at the end of January, compared with the Treasury's initial projection of 276,000 by 1 July 2008.
Finance minister Michael Cullen said the fact that the surge in the number of New Zealanders signing up to the scheme continued into January, in the face of turbulent international markets, suggested the country was undergoing a strengthening in its savings culture.
He said: "The advent of KiwiSaver is, I think, assisting a maturing in attitudes toward short term share price movements, as more and more people keep an eye on the long term benefits of saving and investing."
Crossan agreed the response to the KiwiSaver scheme had been strong.
She said: "Around 400,000 New Zealanders have joined already, which is a lot for a country of 4 million."
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