New Zealand Superannuation Issues
- New Zealand Superannuation (‘NZ Super’) is the Government’s primary contribution to financial security for a person’s later life and ensures an adequate standard of living for older New Zealanders.
- The system needs to be fair, stable, simple, and affordable.
- NZ Super is the eighth least expensive pension in the OECD, as a proportion of GDP.
- NZ expenditure will continue to be well below the OECD average in 40 years without any change to the age of eligibility.
- The current age of eligibility for NZ Super is not low relative to other OECD countries: 70% currently have a pension age of 65 or below, reducing to 53% by the 2060s.
- Discussion around changes to NZ Super needs to consider a wide range of data to inform decisions. Be wary of persons suggesting one off solutions, when recommending changes.
- Any change to the age of eligibility would disproportionately disadvantage manual workers, carers, and those they care for, and those with poor health, due to differences in savings and wealth and ability to remain in paid work after the age of 65. Women, Māori, and Pacific Peoples are over-represented in those groups.
- Means testing is discredited policy, with admin costs, difficulty in identifying the boundaries for means testing, and many unseen consequences, note those suggesting this approach only suggest means testing income and not assets, and frequently such advocates are in trusts camouflaging their own income .
- Re the Aussie Super model, its complex , unwieldy and difficult to replicate. Why would you?
Did you know
- If you had to generate a steady income in retirement, the same as you receive in NZ Super, from your own savings, you would need to have close to $585,000 invested in a balanced fund to withdraw regularly from to age 90, Couples would need close to $920,000 to replace that level of NZ Super on their own and to keep it going to 90.
- Longevity in New Zealandreport, Alison O’Connell. Alison O’Connell New Zealand Society of Actuaries PHD “New Zealand Superannuation is the best protection against longevity risk, and we all need a good NZS system. It is quite possible that, despite the introduction of KiwiSaver, younger cohorts will need NZS just as much, if not more, than older cohorts, because of lower home ownership, lower wage growth, less stable jobs, and lower savings rates.”
- Retirement Commissioner Jane Wrightson says NZ Super is a taonga that protects New Zealanders from poverty in old age. “Claims that NZ Super is unaffordable are not supported by independent, publicly accessible analysis.”
*Compiled by Alec Waugh. Villa 98
NEW ZEALAND SUPERANNUATION- KEY PAPERS, 2004-2024
WONDERFUL PUBLIC POLICY!!!
HOW IMPORTANT IS NZ SUPER?
2013 Michael Littlewood
“New Zealand Superannuation (NZS) is one of the simplest, most effective, and most cost-effective Tier 1 schemes in the developed world. We mess with it at our peril”
2013 Martin Hawes
“NZ Super is a system so simple and cheap that we need to give people certainty and stop playing football with it.”
2017 Diana Crossan ex Retirement Commissioner
“NZ Superannuation is a truly wonderful thing and although we know there is still some poverty in old age, it has made it so much better for so many people, particularly older women. So apart from the age, we do NOT need or want politicians interfering with it!
- Alec Waugh Chairman Kaspanz kaspanz.com
“We are talking of a fundamental societal shift over recent years. Seniors are now the backbone of many of the family economic arrangements in New Zealand. New Zealand Superannuation has become a generational transfer entitlement wrapped around family, equity, and well-being principles.”
2024 NZ Super is a taonga, not a burden: Retirement Commissioner seeks political accord Retirement Commissioner Jane Wrightson says NZ Super is a taonga that protects New Zealanders from poverty in old age.
“Claims that NZ Super is unaffordable are not supported by independent, publicly accessible analysis,” she says.
“NZ Super is a vital part of the retirement income system and needs to be fair, stable, and affordable for current and future generations. Tomorrow’s pensioners will not be in the same position as today’s. We need a way for politicians to take a longer-term, and purposeful approach, so the right decisions are made.
2024 October 10.2024: Longevity in New Zealand report, Alison O’Connell. Alison O’Connell New Zealand Society of Actuaries PHD
“New Zealand Superannuation is the best protection against longevity risk, and we all need a good NZS system. It is quite possible that, despite the introduction of KiwiSaver, younger cohorts will need NZS just as much, if not more, than older cohorts, because of lower home
Acts views on NZ Super are dangerous, National always impulsive and favour one off levers, and NZ First has been the “rock to date” on sensible policy
