The NZ Financial Services Council (NZFSC) wants a form of life insurance, such as an annuity product, to be included in KiwiSaver for anybody over the age of 30.

Kiwisaver is a voluntary long-term savings scheme to fund retirements. The NZFSC wants KiwiSaver to become an election issue, CEO Peter Neilson says.

“The NZFSC plan suggests providing a form of insurance to guarantee anyone who saved would get enough in their retirement nest egg to purchase a second pension,” he said.

“An independent assessment shows that this would cost KiwiSaver members about 0.31-0.35 of 1% in additional contributions – a bargain if your returns are to be 2-2.5% higher each year.”

Mr Neilson says if a government decided the insurance should be paid by taxpayers, it would be just 0.2 of 1% of GDP.

“This would be of particular value to people who spend more time out of the paid workforce, like women looking after family members, or if retirement collided with poor financial markets.”

The NZFSC is working on quantifying the cost of providing a capital guarantee insurance product.