Superannuation Policy Launch

Hon Peter Dunne
MP for Ohariu
Leader of UnitedFuture
Thursday 21 July 2011

New Zealanders should be able to take superannuation at reduced rates down to 60 or increasingly enhanced rates if they hold off until between 66 and 70, alongside making KiwiSaver compulsory, UnitedFuture leader Peter Dunne said today.

“Kiwis would then be able to manage their retirement age and lifestyle – choices they currently do not have – and it would be cost neutral with the current scheme,” Mr Dunne said in launching the party’s superannuation policy.

“Each year below 65 that superannuation would be claimed down to 60, would see a small reduction, and each year over 65 up to 70, it would be enhanced.

Mr Dunne said the figures used would make it cost-neutral with the superannuation scheme as it stands, with the long term sustainability issue addressed by having compulsory KiwiSaver.

“The sustainability arguments around superannuation, and whether it should be 65 or 67, then become redundant,” he said.

“People can then do their own maths and work out what works best for them based on their lifestyle and aspirations,” Mr Dunne said.

He said on current superannuation levels, a couple who get $522 a week today when they turn 65 could choose to wait to 70 and get $840 a week. Equally if they instead chose to wait just two years and get super at 67, they would get $630 a week.

“If they decide to retire earlier than 65, then they would receive a lesser amount for each year until the age of 60.

“Similarly, a single person could still collect the current $339 per week, or on today’s figures get $410 if they waited to 67 or $546 at 70.

“It is very simple. Our policy recognises that today people work and stay active for longer – and it is sustainable for New Zealand in the long term when connected to compulsory KiwiSaver, which frankly we need to do as a nation at some point,” Mr Dunne said.

“Kiwis will have a working, sustainable and secured retirement future and that is what we need to be working towards.

“In the meantime, what we propose gives them choice about how they want to shape their lives in retirement and when they want to begin,” Mr Dunne said.

Other key components of UnitedFuture’s superannuation policy include:

• Amending the superannuation formulation so it is calculated on the forecast changes to the consumer price index and average wage increase for the following 12 months. (Currently adjustments are made after the event, creating a time lag that cheats superannuitants of their full entitlement. Any unforeseen changes to inflation or wages would be adjusted each April, in favour of superannuitants.)

• Exempting those who have themselves contributed to overseas pension schemes from the provisions of Section 70 of the Social Security Act, which currently deducts the amount of their overseas pension from their NZ Superannuation entitlement, thereby penalising them for having provided for their own retirement. Section 70 should only apply where an overseas pension has been fully funded from general tax revenues. (This policy change would currently allow about 52,000 superannuitants to reap the benefit of responsible planning for their retirement.)

Full details of UnitedFuture’s senior citizens policy can be found at www.unitedfuture.org.nz

ENDS

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