11 May 2021

Call for slower implementation of superannuation changes

From Afternoons with Jesse Mulligan, 1:15 pm on 11 May 2021

Retirement Commissioner Jane Wrightson is worried that changes to a bill which governs NZ Superannuation requirements could be implemented too fast.

She tells Afternoons host Jesse Mulligan why she's calling for changes to the New Zealand Superannuation and Retirement Income (Fair Residency) Amendment Bill which is before Parliament. 

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Photo: 123RF

The bill concerns eligibility for superannuation and has been before a select committee. The orginal target was migrants, but it affects a wider group than that, Wrightson says.  People living or working overseas need to be back in the country five years before super payments start at the age of 65.

Jane Wrightson

Jane Wrightson Photo: supplied

"This bill is proposing to raise that [to 10 years] and my main concern is that the timeframe is very quick, and the thing about pension policy is that any changes should be implemented very slowly indeed because people can't plan properly."

She used the example of people who may have left New Zealand to work overseas for many years and returned at 60 to be eligible at 65 for their super, however, if they are 63 on 30 June this year they will have to wait an extra year before being eligible.

"This is just not good enough for planning time... the main concern is the speed of change - it doesn't need to be fast.

"I don't know why this has turned into such a sprint towards the finish when the policy thinking around this is still quite formulated... I don't think the bill in its current form is fair."

People who are wealthy would be able to cope, but for those needing to work, finding a job in their 60s can be very difficult, and they may have to rely on partners or see if they qualified for the Jobseeker benefit, Wrightson says.

She says women arrive at retirement age in worse financial shape than men because of time out to raise children, the gender pay gap and their working lives are often not as long as men's.

"Whichever way you look at it, women's retirement position is not as good as men's and this kind of speedy bill, again affecting planning, doesn't help either."

Wrightson did not make a submission to the select committee, which she now regrets.

She says New Zealand has social security agreements with countries such as Australia, Canada and Ireland but "you then have to line up with the eligibility age of those countries".

For those spending time in Australia, the supernanuation eligibility age will shortly move to 67.

"One of the beauties of a good New Zealand super system is that it's the least complicated as you could manage it. What this tells us overall is that people need a consistent framework so that they can plan and save, so that's why changes to it that come out of nowhere ... need to be scrutinised very carefully."

She says the bill is yet to have its second reading so it is possible Parliament could make changes to it.

*Jane Wrightson is on the RNZ Board of Governors

 

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