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Peter Dunne slams retirement report

Wednesday 09 Oct 2013 12:25p.m.

Reaction mixed to proposed retirement changes

United Future leader Peter Dunne has slammed a new report by the Retirement Commissioner, saying it won't help New Zealand deal with an increase in retirees.

Retirement Commissioner Diane Maxwell says by 2050, one in four New Zealanders will be over 65, and planning is needed to deal with the changing demographic.

Her report makes a number of recommendations, including gradually raising the age of eligibility for superannuation over time.

But Peter Dunne says it's a missed opportunity.

"We know 65 is not going to shift while this Prime Minister is in office," he says. The Labour Party equally is not going to budge from 67, so having this sort of pretty sterile debate about the age misses the point about where people's retirement aspirations are, what their pattern of income is, where KiwiSaver fits into this."

Other recommendations in the report include the Government scheduling a superannuation review by 2017, and establishing a working party to identify gaps in the KiwiSaver scheme.

His Flexi Super policy, which is subjected to a Government-led public consultation process, "has the potential to be the circuit-breaker required to get the superannuation debate back on track".

However the Retirement Commissioner seemed to have not considered the policy, he says.

Council of Trade Unions secretary Peter Conway says there is mounting concern low wages, insecure work, falling levels of home ownership and high levels of personal debt will make it difficult for people to save and plan for a reasonable standard of living in retirement.

The commissioner's recommendation will raise concerns among workers around the adequacy of retirement income even though measures have been included to help the most affected, he says.

"The proposal to dilute the indexation to the average wage runs a severe risk of reducing the value of New Zealand Super payments over time."

But the union did support the recommendation the Government should contribute KiwiSaver payments while parents are on parental leave.

It wants to maintain NZ Super as it is, but lift the top tax rate to generate additional income, and boosting the level of employer contributions to KiwiSaver to 6 percent, phased in over 3 years.

Meanwhile Business NZ has welcomed the recommendation, saying it provides practical ideas to help Kiwis prepare for retirement. 

Chief executive Phil O’Reilly says having a quarter of the population over 65 by the middle of the century means the system "must undergo some change".

"New Zealand's mix of private and publicly funded savings is a good framework that can be strengthened further with the commission’s proposals for greater voluntary KiwiSaver enrolment, indexation of national Super against wages and prices, plans to encourage more use of annuities and more focus on financial literacy training."

The commission's proposals would allow for steady, prudent improvements to a sustainable system for retirement provision, he says.

3 News

 
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