WELLINGTON (Reuters) - Contributions to New Zealand retirement savings scheme, KiwiSaver, are to rise from April 1 as the country seeks to improve its savings level, the government said on Wednesday.
The minimum amount to be put into the voluntary scheme will rise to 3 per cent of a worker's gross wages to be matched by a similar sized contribution by the employer.
Finance Minister Bill English said the move would help to boost retirement savings.
"They will also reduce the amount the government is borrowing, largely from overseas investors, to fund private savings," he said in a statement.
The scheme is backed by government start-up grants for new members and tax credits for contributions.
Around 2.1 million New Zealanders, about half the population, are in the scheme with around NZ$15.4 billion (S$16 billion) invested.
New Zealand has a state pension scheme funded from taxes, which is paid to all people aged 65 and over.
There is also a long term New Zealand Superannuation Fund, with more than NZ$20 billion in investments, which is designed to part pay for future pension costs starting from around 2025.