Time to retire should be made flexible

Several politicians criticised Retirement Commissioner Diana Crossan for suggesting increasing the eligibility age for national superannuation could be one way of stretching NZ’s superannuation dollar.

But the Retirement Commission’s report, which for the record also contained alternate suggestions including raising taxes or decreasing the amount paid to superannuitants in the future, should be debated. We should not shoot the messenger

Yes, the issue of when New Zealanders should qualify for the government funded pension has been a perennial debate, but not against the backdrop of KiwiSaver.

Might it be time to build some flexibility into New Zealand’s system?

 Why should people “retire” , currently at the age of 65, to start collecting national super and cash up their KiwiSaver scheme (if they have one) if they are perfectly capable of continuing to work and are a valued member of the work force? Should they be given an incentive to build their retirement nest egg say to when they are 70?

Britain, Denmark, Germany and Ireland have all lifted their pension age above 65. In contrast in some countries the age is lower than 65. Hong Kong civil servants have to retire at 60 and in Malaysia it’s 56. In many countries occupations also dictate the age people are “pensioned off”.

However, through changing lifestyles and the intervention of medicines, New Zealanders are among those living longer. The 2007 Social Report from the Ministry of Social Welfare shows, based on the mortality experiences of New Zealanders in the period 2004–2006, life expectancy at birth was 77.9 years for males and 81.9 years for females. And since the mid-1980s gains in longevity have been greater for males than for females.

At the other end of the scale, the government will not contribute tax credits to KiwiSaver schemes started by young people under the age of 18. What about the young people who leave school between 16 and 18 to start apprenticeships? Shouldn’t they be encouraged to start saving from the outset? They are paying tax so why shouldn’t they receive the same benefits as someone over the age of 18?

The thinking that bought New Zealand its Superannuation Fund and KiwiSaver should now be applied to the pension/retirement debate.

Perhaps people should be able to access KiwiSaver from age 55 if they so wish and people should be given even more incentives to lock away funds earlier for retirement to encourage a savings culture.

Saying lifting the eligibility for super “has been tried before” is simply not good enough – especially in election year when voters want to make informed choices.

Jamie Coltman