Retirement Policy Forum: Age of uncertainty

Two international guest speakers (The Hon Nick Sherry, Australian former Minister for Superannuation) and David Harris (Managing Director TOR Financial Consultant)) spoke to a small audience of 25 persons, at the Retirement Policy and Research Centre of the University of Auckland Forum: Retirement Policy in an Age of Uncertainty. Supporting cameos from Susan St John, Michael Little wood, and Claire Dale, added to the substance of the event.

The guest speakers deserved an audience of at least 150 plus, both providing quality presentations, each meeting the threshold of expectation when listening to international speakers.

What does it take to get NZ commentators, key politicians,  policy staff from the various  MMP parties’ research units to such presentations, the comparative analysis and information provided adds depth to any ones knowledge.  I did not sight anyone from the Commission for Financial Literacy, David Seymour, and Fran O’Sullivan etc. Has the Maori Party ever attended similar forums?

Nick covered the Australian Superannuation system, historically and current development, emphasizing Australia is more similar to the United Kingdom model, while New Zealand has developed its own models. Soft and hard compulsion approaches were discussed and the role of the private sector in Australian was highlighted. His experience with reforms and reviews of the Greece situation was intriguing.  He emphasized from his perspective he had personally reached the point that more reform is inevitable, and costs are likely to increase well above economic growth.  In summary a gloomy future predicted.

David addressed local thinking, with global pension reform findings and lessons for New Zealand.  He has an intimate knowledge of the United Kingdom, Danish systems, and Irish reforms. He emphasized New Zealand’s current New Zealand Superannuation and Kiwi Saver models  were satisfactory for the current generational profile, fit for current purposes, but less certainty re needs of future generations. Longevity risks, Housing, growth in long term care costs were to the fore, and the need for annuity products to emerge. His Danish Dashboard information screenshot was very interesting.  David is an international guru on pension policy particularly with the comparative analysis, a dimension so often missing from the New Zealand scene.

Both speakers said New Zealand compared to most was in a relatively strong position on retirement income costs and sound  operational systems in place, and that’s a good place to begin reviews and adopt best practice options for the future. Both speakers would be useful resource for advising Government thinking, let’s hope the Labour and National parties do engage with such people!

A common theme from all the speakers was NZ appears to be sleep walking on the issue, but with no accord among political parties, and often superficial comment from individual commentators, a high risk of unsound policy decisions sometime in the future, was likely.

What’s required to address the issues?

Putting in place a Task Force or Commission on retirement income issues e.g.  A Tax System for New Zealand’s Future: Report of the Victoria University of Wellington. Tax Working Group. January 2010, or for those with memory over time the 1967 Commission on Tax known as the Ross report, would assist. The Commission for Financial Literacy should be commissioning on a regular basis, research on key issues, and bi-annually hosting a symposium or National Conference on retirement income topics. New Zealand business should be considering its role on the various issues , perhaps funding a number of PHD candidates, and New Zealand’s academic institutions should be resourcing scholarship and providing a focus on retirement income policy and issues. The University of Auckland is to be applauded for actually having a Retirement Policy and Research Centre, now is the time to enhance the unit and enhance its fine record.

 

Posted by Alec Waugh

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