The latest Treasury projections show that NZ Superannuation is sustainable for at least the next 30 years, and raising the age would do more harm than good, Mr Peter Cordtz, interim retirement commissioner, has said in the three-yearly Review of Retirement Income Policies. NZ Super is the government pension scheme which pays benefits to Kiwis over the age of 65, subject to residency criteria.
This announcement contrasts with two previous reviews which called for a rise in the age of eligibility for NZ Super as it was deemed unaffordable.
“Its economic context has changed over time – it now looks affordable for the medium term, even though it did not necessarily look so in earlier years,” said Mr Cordtz who presented the report as his appointment as interim retirement commissioner ended earlier this week.
“Our research found that there will be more people in need of state support as they enter retirement in coming years, not fewer, due to declining home ownership, rising levels of debt and the changing nature of work inhibiting people’s ability to save,” he said.
The 108-page report contains 19 recommendations that traverse areas of housing, work, KiwiSaver (a voluntary, work-based savings scheme) and enhancing New Zealanders’ financial capability. The report also calls for the Retirement Commissioner’s office to be given more power to lead development and co-ordination of policies that will ensure New Zealanders can prepare for a good standard of living in retirement.
“NZ Super and KiwiSaver are the two core planks of the public retirement income system, but they are supported by a wide range of government policies that help New Zealanders learn, earn and house themselves as they move through their lives,” said Mr Cordtz.
The key recommendation in the report regarding NZ Super is to retain it at its current settings for future generations, and reassure younger New Zealanders that it will be there as a backstop for them when they retire.