Users of this site over time, will be aware that Kaspanz questions some of the assumptions and formula used by the Mercer Group. Michael Littlewood the Guru of New Zealand Super Research, has written 2 articles concerning their methodology and questions some of their assumptions?.
However debate and comment is always welcomed and this article from the New Zealand Lifetime Income Group is interesting reading
NZ Pension “good for integrity, poor for adequacy” report finds
New Zealand has the 15th-best pension system out of 44 countries surveyed in a new report. Eric Frykberg explains more.
The study is the latest in an annual series conducted by the international finance, investment and human resources company Mercer CFA Institute, with help from Monash University in Australia. Every year it examines the pension systems of all the major economies, which cover 65 percent of the world’s population.
This year, Iceland was deemed to have the best pension system of all, with the Netherlands and Denmark second and third, respectively. Thailand had the lowest score. Mexico was the most improved country. New Zealand’s ranking of 15th was the same as last year.
An extra problem was the move away from private sector pensions in favour of lump sums in retirement, as well as questions over the adequacy of money available for retirement and some Governments’ decisions to cut back on levels of support.In producing these figures, the researchers looked at three things: the adequacy of a pension, its sustainability and its integrity.
In a chapter of the report, the authors look deeper at New Zealand. They describe the three legs of the pension system here: NZ Super, KiwiSaver and occupational or employer-based superannuation schemes. It says the overall value for the New Zealand system could be increased in several ways.
One would be to increase the level of KiwiSaver contributions. Another would be to increase the level of household savings generally or reduce the level of household debt.
But the Government here has shown no interest in pursuing this idea and has generally tried to avoid answering questions about it.
Written by:
Eric Frykberg
Semi-Retired, Eric worked in journalism for 45 years across print, radio and television, in New Zealand, Australia and Britain. He has specialised in business, finance, energy, mining, transport and agriculture. He was also foreign correspondent for RNZ for many years. He can be reached on ericf25@hotmail.com.