*Notes only, not minutes, from meeting with Retirement Commissioner Jane Wrightson
February 21, 2023
Present Alec Waugh, Chairman Kaspanz, Jane Wrightson, Retirement Commissioner and Anika Forseman
Alec spoke to a list of his agenda items
HARD COPY AVAILABILITY OF KEY REPORTS.
Janet responded a small amount is always available but on line is the normal method, especially research papers. Alec responded its not one or the other, good policy would be for a standard number to be in hard copy, available on request. Researchers, and older generation always want hard copy, and there are over 500,000 NZ who have poor connectivity skills due to age, or location unable to access on line material
COMMISSION ROLE
Alec raised the Kaspanz view that the Commission should be a Centre of Excellence, Core Knowledge on Retirement income issues. A depository of International Comparative Research, with a clear Policy and Research Function, staffed accordingly. Also, a Library resource of key papers, commentary on retirement issues. A good discussion followed, no fundamental disagreement by all on the objectives, but resources, political will etc., fostering of financial capability, key components always present.
*We have policy responsibility for fostering financial capability in New Zealand and monitor the Retirement Commission on behalf of the Minister of Commerce and Consumer Affairs. The Retirement Commissioner heads the Commission and is responsible to the Minister of Commerce and Consumer Affairs and the Minister for Housing and Urban Development. The Retirement Commissioner has functions under 2 acts: The New Zealand Superannuation and Retirement Income Act 2001(external link)
The Retirement Commissioner is required to complete a review of retirement income policy in New Zealand every 3 years.
NZ SUPERANNUATION
Alec raised that NZ Superannuation was the cushion for all Retirement Income. Excellent Public Policy, a foundation symbol of retirement income. Alec raised NZ Super, Kiwi Saver, Capital Gains, a land Tax or similar, and no asset or Trust protection, so all income is transparent to be taxed according to the Tax rules of the day, was the Utopia of retirement income policy. Some of these issues were unlikely to be achieved, but the principles were sound. NZ Super needed to be acknowledged as gold standard, a world leader. Kaspanz message was do not play around with good Public Policy.
A good discussion followed, all agreed misinformation, and lack of knowledge often a factor.
ACADEMIC ENCOURAGEMENT
Encouraging academic research, and perhaps a PHD annual Retirement Income Scholarship a role of the Commissioner . Jane mentioned the principal was sound, working around both the personalities and functions was always demanding, but this objective was currently a discussion issue.
LAST RETIREMENT INCOME SUMMIT 1991
Time for another one. Jane mentioned work on this is also a discussion in progress.
FINANCIAL LITERACY NZ COMMUNITY
Goal cannot be questioned, but it is a bottomless Pit resource wise, with poor measures to measure actual improvements/adjustments by the Public at large.
Alec commented on the similarity in the 1970’s with the then Police Law education program in schools, a sound model, with curriculum development and teaching certification key components. Not enough resource to measure whether making a difference and this principal would apply to the Commission efforts.
Retirement Commissioner responded working in partnerships with others is a key here, but acknowledged the resource issue and improvement measures are difficult, political hand to be seen to be doing something also also a big factor.
NZ SUPER FUND
Alec raised this issue, seeing the Fund as being not necessary. Very vulnerable to Political whim to misuse at any time. The amount gathered currently and in future could be better utilized elsewhere.
NZ Super is cost effective and comparatively cheap compared to all other options and off shore comparisons. NZ should embrace that reality. No alternatives that are politically viable can match the current model, so let us highlight its quality, gold plated standard and focus on other issues.
OVERSEAS PENSIONS
While the spousal issue has been resolved, there are significant policy issues needing to be addressed on this topic. Should not be forgotten.
- Not a specific topic but concern re misinformation, lack of knowledge and silliness projected on Retirement Income issued by many commentators. Social media platforms worsening the situation. No easy options here, but highlighting the quality of NZ Super policy, rather than a defensive approach might be a useful tactic?
Wikipedia
Te Ara Ahunga Ora Retirement Commission, is a Crown entity under the New Zealand Crown Entities Act 2004. The Commission provides financial education and information to residents of New Zealand, advises government on retirement income policy, and monitors the effectiveness of the Retirement Villages Act 2003. Wikipedia
Founded: 1995
Employees: 30+
Annual budget: $8.6 million
Hi Alec
There are quite a few anomalies regarding the current Super legislation. I came to NZ from UK at age 25 and then moved to Thailand 7 years ago on reaching retirement age.
The Social Welfare Act covering reciprocal pension payments between UK and NZ does not allow me to claim any proportional pension payment from NZ unlike what I am currently receiving from both countries whilst living in Thailand.
According to the reciprocal agreement should I wish to retire back to the UK I would only be entitled to claim the ‘Basic State Pension’ (born in 1950) currently worth £141.85 per week equivalent to $277.77.
If I was living in NZ I would be receiving $495 per week after tax (living alone allowance). In Thailand I am receiving $440 a week from NZ based on 40 out of 45 years proportional payment of the untaxed single sharing pension rate.
The UK pension of £47.18 per week which has been frozen at that rate since 2015 equates to $92 so the pension totals up to the equivalent of $532 per week. Of course I am at the total mercy of the currency exchange rates between NZ, UK and Thailand which have been anything but stable.
The reality is how could I ever contemplate retiring back in the UK when the ridiculous reciprocal social welfare agreement would prevent me from claiming a proportional pension payment from NZ and thus only receive £147.85 per week.
This is quite shocking when you realise that the other handful of pension agreements NZ has signed with other countries all require NZ to pay their share of the pension on a proportional basis.
An issue that I have raised with government officials (unsuccessfully) is the discriminatory treatment handed out to immigrant workers who have spent 20 years in NZ and wish to retire back in their homeland.
Pacific Islanders are able to retire back to their homeland after working in NZ for 20 years and claim 100% of their NZ Super under the pension portability regulations.
However immigrant workers from countries such as India, China and Philippines who have also worked in NZ for 20 years can only claim less than half the pension that Pacific Islanders receive should they wish to also retire in their original homeland.
Government officials defend this blatant discrimination by stating that everyone no matter their nationality can take advantage of the legislation and retire in the Pacific Islands and receive their full entitlement of the NZ pension after working in the country for 20 years.
There is one small problem with that pitiful argument and that is there is no guarantee that immigrant workers from Asia would be unilaterally allowed to reside and retire in the Pacific Islands named in the pension legislation.
This discriminatory pension legislation highlights the gross inadequacy of reciprocal agreements covering non traditional immigrant workers who have arrived from Asia over the last 30 years.
As it stands now a worker from Asia may spend a number of years in NZ without getting permanent residence. They get sent back to Asia and cannot claim any pension payment from NZ when they eventually reach retirement age.
The reality is that the NZ government is extorting immigrant workers who have come from a country that does not have a reciprocal pension agreement. The government is also extorting dual UK /NZ citizens who may wish to retire in the UK by refusing to pay their proportional share of the pension.
Appreciated. I have learnt something from your e-mail. Your issue is of course the political problem, of how do you get the unfairness addressed. I dont have the magic wand, but your rationale is sound