Migrants need to be on resident-class visas to be part of the KiwiSaver scheme. Photo: 123RF
People in New Zealand on temporary work, student or visitor visas could end up missing out on billions of dollars of retirement savings.
A Retirement Commission report has raised concern about the loss of retirement savings from the pockets of future New Zealand-based retirees, who were yet to transition to resident-class visas.
Until they do, they cannot contribute to KiwiSaver and are missing out on personal, government or employer contributions to KiwiSaver.
The research conducted by Auckland University of Technology (AUT) followed 70,305 migrants over 10 years and found that after five years, about 10,000 of these migrants were still in New Zealand on temporary visas.
The estimated loss in retirement savings over that decade, including interest gained over time, was $36,000 - $51,000 by the time they reach 65 years old.
"Every year, a new group is likely to be missing out on a decent chunk of their retirement savings," Retirement Commission policy director Suzy Morrissey said.
"If temporary migrants could access KiwiSaver, they'd have a much fairer start on their journey to retirement.
"For those who left New Zealand, they wouldn't be allowed to take the government contributions, so only their personal and employer contributions and any interest earned on those would leave the country."