Thousands of temporary migrants are missing out on billions in retirement savings, new research has found.
The study, completed by AUT and funded by Te Ara Ahunga Ora Retirement Commission followed 70,305 migrants on temporary visas for a decade from 2009.
People living in New Zealand on temporary work, student or visitor visas are not allowed to join KiwiSaver until they make the switch to resident-class visas.
After five years, the researchers identified 10,000 migrants in this group that remained on temporary visas after five years, making them ineligible for KiwiSaver.
It's estimated these migrants will have missed out on $36,000-$51,000 in savings, including interest, by the time they turn 65.
With future Aotearoa-based retirees missing out on potentially billions from not being able to access KiwiSaver, Te Ara Ahunga Ora's director has called for the policy to be scrapped.
"If temporary migrants could access KiwiSaver, they’d have a much fairer start on their journey to retirement," Dr Suzy Morrissey said.
Morrissey said that although migrants could save for retirement using alternative methods, they’re unlikely to receive the same benefits.
"KiwiSaver is designed to require little effort and remove the usual barriers to long-term investing – so for these people the support is just not there."
Rebecca Jenner, an immigrant from Britain, has missed out on three years of KiwiSaver benefits due to being on a temporary migrant visa.
Jenner says it's "frustrating" to be three years behind despite working and paying taxes that go towards others' retirement funds.
Morrissey says an approximated 28,000 migrants from the 2009 group could have joined KiwiSaver had they been eligible, and noted this was a conservative estimate.
“Every year, a new group is likely to be missing out on a decent chunk of their retirement savings.
"Over ten years, this could add up to over three billion dollars being missed out on by migrants. That is a significant disadvantage for them in their later years of life.”
The majority of migrants are also younger - on average, those on student visas are 24 and those on working visas are 30 - making the total amount of missed savings even more significant, Morrissey said.
Dr Morrissey noted that the cumulative impact of this policy is likely to be sizable, considering the study followed only one annual cohort of migrants.
"Every year, a new group is likely to be missing out on a decent chunk of their retirement savings. Over ten years, this could add up to over three billion dollars being missed out on by migrants. That is a significant disadvantage for them in their later years of life," Morrissey said.
Te Ara Ahunga Ora will now look to make recommendations to the Government for a new migrant KiwiSaver policy.
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