retirement.org.nz

The Retirement Commission helps New Zealanders prepare financially for retirement, through education, information and promotion.

Our work focuses on three key elements vital to New Zealand's retirement income framework:

•     Maintaining stable effective government policy.
•     Developing a more trusted financial services sector.
•     Creating a financially educated population.

These three elements need to be in place so that all New Zealanders have the confidence and ability to make informed and lasting decisions about their finances throughout their lives.

New Zealanders' standards of living in retirement will depend largely on what assets and income they have during their retirement years.  Their income is likely to come, as it has for many years, from three major sources: government, private savings and investments, and workplace superannuation.

Through its goal of economic transformation, the Government aims to develop a high-income, knowledge-based economy which will lift living standards over time. Therefore New Zealanders' expectations of retirement income are also likely to increase.

A fundamental assumption for any retirement planning or decision making is that the government will continue to supply a basic income to older people. For some years there has been broad political consensus supporting this approach. If individuals want to receive more than this basic retirement income, then they must take action themselves.

New Zealanders are faced with issues of funding education, home ownership, investing in businesses, debt management, and family financial obligations. They need to fit financial preparation for retirement into this framework.

Simply saving some money for retirement may not be possible or indeed be the best financial choice for some individuals and families at certain stages of life. The traditional message that 'you must save for your retirement' is now of less practical use to people functioning in an advanced modern economy and a changing society.  Financial decisions involve increasingly complex and subtle considerations about the sources and uses of personal funds throughout life.

The government may provide limited subsidies to the savings of some New Zealanders, through the KiwiSaver scheme.  However, tax incentives or compulsory contributions to pension schemes have been considered and rejected by three reviews of retirement income, and compulsion by the 1997 referendum.

What does matter is that when people make their financial decisions, they are aware of all their options, and the issues and implications involved. High consumption today will be at the expense of less to spend later.  Borrowing to buy that luxury item could add heavy debt payments to an already stretched household budget.

The Commission takes a lifetime view to educating and informing the public about managing personal finances. Financial attitudes and behaviours start early in life, as do opportunities to build the basic skills of literacy and numeracy needed to make sound financial decisions.  So, for example, we are helping to integrate personal financial literacy education programmes into the school curriculum.

As well as our retirement income responsibilities, we have taken on certain functions under the Retirement Villages Act 2003.  The purpose of the Act is to protect the interests of residents and intending residents and to enable the development of retirement villages under a readily understandable legal framework.

The Retirement Commission has a broad guardianship role in protecting the interests of residents of retirement villages.

• Our educative role assists people to make informed choices and understand their rights.
• We monitor the effects of the legislation and advise government on issues, codes of practice and policy.
• We engage with the industry, the wider sector and the media.
• We have a specific statutory function in appointments to disputes panels.