retirement.org.nz

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

Our work contributes towards 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 that 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 nor indeed 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.

It is important that when people make their financial decisions – such as opting in or out of KiwiSaver – they are aware of all their options, and the issues and implications involved.

The Commission is funded to provide information to help people make an informed decision on financial products such as KiwiSaver. All information is impartial and independent.

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.

We are also in the early stages of working with providers and industry training organisations, to investigate the possibility of financial education becoming a core part of many tertiary qualifications. We are working with financial service industry organisations to help them raise the bar on quality of product, service, information and advice.

In 2007 the Commission conducted its first three-yearly review of retirement income policies. The 2007 review provides a contextual overview of current policy settings and outcomes, followed by more in-depth analysis. It helps widen our shared understanding of current retirement policy and where it is heading.

The national strategy for financial literacy, led by the Retirement Commission, with input from many individuals and organisations across the public, private and voluntary sectors, will be published in June 2008. It sets a direction to link providers of financial education and information, identify any gaps in coverage and avoid duplication.

The Retirement Commission has a role in protecting the interests of residents and intending residents of retirement villages, by monitoring the Retirement Villages Act 2003.