The reintroduction of some form of superannuation surcharge, and a new political accord on retirement incomes are the two key recommendations of Periodic Review Group's (PRG) concluding report.
"Some new way of targeting New Zealand Superannuation needs to be found once the surcharge is abolished in April," the group said when this morning, when it released its final report.
The report also puts pressure on all the political parties to revitalise the 1993 accord.
PRG chairman Jeff Todd admits it's not an easy task and that there were some failings in the earlier accord, however political consensus is "an achievable and worthwhile goal...We think the public expects no less."
"The full potential of the current framework will only be realised if the political parties accept the need to re-establish an on-going agreement on retirement income policies.
"The first step in coming to such an agreement is for the parties to get together to discuss our report and to develop a work programme to implement its recommendations," Todd says.
The PRG reaffirms its earlier view that overall "the system is in good shape and with some modifications, will serve New Zealanders well in the future."
It also says the current mix of private provision and public pension was the right framework for superannuation.
The ideal framework, in the PRG's view, has five elements:
private provision should be made in a voluntary tax neutral environment
public provision should be made by way of adequate state pension
private and public provision should be linked so that public provision is reduced as a person's total income increases
there should be a regular review of the framework
there should be public and private consensus on the framework
The PRG team also recommended a number of changes to NZS in the next two years:
collecting better information on the factors affecting the living standards of older people
phasing out differences in NZS rates based on marital status
looking at the possibility of a standard living alone allowance
developing more effective supplementary assistance programmes
considering amending the Fiscal Responsibility Act so that governments are required to state how they plan to address demographic and other pressures beyond the current 10 year minimum
The PRG also recommends that more funding be given to the collection of statistics on private savings and to the Office of the Retirement Commissioner, and that the issue of prospectus requirements for employer superannuation schemes needs urgent reappraisal. Click here for a copy of the PRG report
The reintroduction of some form of superannuation surcharge, and a new political accord on retirement incomes are the two key recommendations of Periodic Review Group's (PRG) concluding report.