NEW ZEALAND/UK - KiwiSaver and Personal Accounts should not be taken as like-to-like schemes when drawing comparisons of success, according to the Pensions Policy Institute (PPI).
Niki Cleal, director of the PPI, said at a seminar today: "If one third of people auto-enrolled into UK pensions were to opt out in 2012, as seen in New Zealand, that would equate to around 7 million new work-based pension savers.
"However, some of the key risks associated with introducing auto-enrolment into pensions saving in the UK do not apply to the same extent in New Zealand: such as the interaction with means-tested benefits and the risk of employers levelling-down existing Pensions."
Attendees at the seminar included Cathy Magiannis, programme director of KiwiSaver, from the New Zealand Inland Revenue, and Alison O'Connell, former PPI Director and independent researcher advising New Zealand's Retirement Commission.
A key concern in the UK has been that Personal Accounts would compete with existing retirement provision. Since the KiwiSaver was introduced a year ago, there has been little evidence of this happening in New Zealand.
The PPI said this was probably due to a caveat in the KiwiSaver system which would allow existing employer-run schemes to be converted to a compliant plan. The UK, so far, has not passed legislation to permit such a change.
Other differences in employer contribution rates and the UK means-testing benefit allowances, meant spectators should be careful when evaluating the two systems, the PPI concluded.
The top stories this week were the High Court's decision to block the £12bn annuity transfer from Prudential to Rothesay Life, and a separate court ruling that 'raises the bar' for pension rectification exercises.
Guaranteed minimum pension (GMP) equalisation has soared to the top of pension schemes' to-do lists, with 58% stating it is a priority project, research from Equiniti has revealed.
Professional Pensions is holding its defined contribution (DC) conference on 4 September.