"The scheme was launched at the NZEI conference and it's already exceeded expectations with around 30% of eligible teachers joining by the end of October and the number still growing," Mallard says.

"One of the main reasons behind this scheme is to support the Government's policy of encouraging retirement savings in the state sector. The enthusiastic response to the scheme shows that the message is getting through and also that even a small employer contribution will encourage savings."

The proposal to develop a retirement savings scheme for teachers was an outcome of the settlement of both the primary teachers and primary principals collective agreements last year. The funding for the employer contribution was part of the overall cost of the settlement.

In a joint working party, the NZEI and the Ministry, with NZ School Trustees Association, Treasury, State Services Commission representation and special advisors, designed a scheme to specially meet the needs of teachers and principals in the state sector.

The scheme has an initial matching employer contribution of one percent of salary, which will increase over time. This cost of the employer contribution is over $5 million in the first year.

The initial provider is GRT, a not-for-profit trust umbrella superannuation scheme. By July next year and following a tender process, it is proposed to have 2-3 other providers. Eligible teachers will then have a choice of schemes, Mallard says.