Kōura Wealth said a contributions' sharing mechanism could be brought in with a simple change to the KiwiSaver Act. Photo: 123RF
KiwiSaver provider Kōura Wealth is urging a change to the scheme to allow couples to share contributions to bridge the gender gap in retirement savings.
Under the proposal couples could agree to split a mutually agreed amount of either partner's KiwiSaver contribution on a yearly basis for a specific period.
Kōura Wealth founder and managing director Rupert Carlyon said such a change would ensure those stopping work to have or look after children, or who were earning less because of pay gaps in their work were not financially disadvantaged in retirement.
"This proposed change is a no-brainer, but it took time for us to find a responsible answer and actionable solution ... the overall system is inequitable, and that's not good enough."
He said KiwiSaver needed to be treated as a household financial matter and not just based on the individual.
Research this year from the Retirement Commission showed the average KiwiSaver balance for women is 20 percent lower than for men, while a year off work on parental leave is estimated to cost a person about $5100, which could have an eventual compounded cost of $16,000 to their final KiwiSaver amount.
"If you do want to do this and you do want to share your KiwiSaver contributions under the current law there's no way it's possible," Carlyon said.
"To make this happen it's a fairly simple change to the KiwiSaver Act to enable this to be another permitted withdrawal."
The company is organising a petition to Parliament for a law change and Carlyon said he would talk to other KiwiSaver providers to get their support.
He said a contributions' sharing mechanism was in place in Australia and it should be achievable here using Inland Revenue.