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KiwiSaver Evaluation Literature Review: Final Report to Inland Revenue

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Publication Date: December 2006

Publisher(s): Tax Policy Center

Author(s): Eric Toder; Surachai Khitatrakun

Special Collection: John D. and Catherine T. MacArthur Foundation

Topic: Economics (Economic theory)

Keywords: Elderly; Retirement/Pensions; Tax Policy; Taxes and Social Programs

Type: Report

Abstract:

KiwiSaver is a new saving incentive program in New Zealand that requires automatic enrollment of all new employees, with an option to opt out. KiwiSaver also subsidizes participation, but its subsidies are smaller than tax subsidies for saving in qualified retirement plans in the United States. Recent research shows that using automatic enrollment as a default rule substantially increases participation in retirement saving plans, but evidence on whether saving incentives plans increase net saving is mixed. KiwiSaver is the first large-scale test of whether default rules can be more effective than financial incentives in increasing retirement saving.