retirement.org.nz

New Zealand has persisted with its unique superannuation policies into the 21st century. This implies travelling in a different direction to the course taken in Australia, and that favoured by the World Bank. New Zealand has two pillars only: a state pension and voluntary unsubsidised saving. There is no compulsory pillar of pre-funded privately provided pensions. This paper reviews the policy debates of the 1990s and examines recent initiatives under the Labour Alliance government. These include the proposal to partially fund the state pension and the endorsement of universal pensions of at least 65% of the net average wage for a married couple. While compared to many other countries the NZ system has advantages of simplicity and cost effectiveness, there are some significant issues still to be debated as the demographic bulge heads towards its retirement. One intergenerational concern is that universal pensions are paid to all over 65 in an otherwise residual welfare state. Another is that many middle-income retirees of the baby boom generation will fail to provide themselves with an adequate supplement to their state pension. Furthermore, whether or not the legislation for partially funding NZ Superannuation is adopted, there is a real prospect of further instability in superannuation policy in the years ahead.  December 2000.
 

Attachment
Accumulation retirement wealth 2007