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Recommendations on Retirement Policy Make Good Sense
9 October 2013
Recommendations on Retirement Policy Make Good Sense
Financial Services Council CEO, Peter Neilson has welcomed recommendations to address taxation, affordability and accessibility of KiwiSaver and the controversial issue of age eligibility for NZ Super contained in a discussion document just released by the Retirement Commissioner.
The
recommendations in the Retirement Commissioner’s
Discussion Document for the 2013 Review of Retirement Income
Policies, include:
§ Addressing a major tax impact
that discourages long term savings – taxation of the
nominal component of interest
§ Recognising that while NZ Super helps New Zealanders avoid absolute poverty in old age if they own their own home, mortgage free by retirement, KiwiSaver will be necessary for most people to achieve a comfortable retirement with an income much higher than NZ Super alone
§ Proposing a mechanism to automatically adjust the age of eligibility for NZ Super over time to reflect increasing longevity
§ A day of automatic enrolment into KiwiSaver as soon as possible
§ The age of eligibility to access KiwiSaver balances be retained at 65 even if the age of eligibility for NZ Super moves out.
“The proposal to change the indexation of NZ Super is likely to be controversial, but any coherent plan to make our retirement income policy socially, economically and politically sustainable is going to have features that someone won’t like,“ said Peter Neilson, CEO of the Financial Services Council, which represents the major KiwiSaver providers and related companies.
The FSC will be discussing how to supersize retirement incomes at The Future of Super Conference it is hosting on Monday 14 October at the Pullman Hotel in Auckland. Retirement Commissioner, Diane Maxwell, is one of the speakers.
“The Retirement Commissioner’s Discussion Document is a major contribution to the debate on retirement income policy and we would encourage New Zealander, particularly those under 40, to join in the conversation,” Mr Neilson said.
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