by Rob Hosking
National has repeatedly said it remains committed to the “65 at 65” pension level – 65% of the average wage at the age of 65 – but has refused to sign up to the part of the Superannuation Act guaranteeing those levels.
The policy option of making the payments at 65 optional appears to be the reason for that omission.
The notion of making the age at which state funded superannuation more flexible is gaining considerable respectability. Last year the Retirement Commissioner, Diana Crossan, hosted a seminar on the issue, and commented that the numbers of people working on past the age they start to receive New Zealand Superannuation is a growing trend.
“Some people physically need to retire before they reach 65, others want to retire, and others want to keep working into their 70’s. What we’re starting to see is the changing nature of ‘retirement’ itself.”
UK-based research from Professor Richard Disney showed the benefits to the economy of people working later.
Disney’s research made a case study of New Zealand because it is one of only two countries that has raised the age people receive the state funded pension, from 60 to 65.
The Periodic Review Group report, released just before Christmas, also suggested either lifting the age or “possibly making the age of full entitlement to NZS more flexible.” While some New Zealanders are able to retire later, manual workers, and those in bad health, do not have that option, and if the overall age is raised some provision would have to be made for that group, the report said.
The age of 65 has always been a benchmark for state paid pensions, however. The first modern scheme, developed by Otto von Bismarck in Germany in the late 19th century, was received at the age of 65 – although at the time the average German popped his or her clogs at the age of 45.
The original New Zealand scheme, set up by the Richard Seddon Liberal government in 1898, was also set at 65 – despite 59 being the average age of mortality at the time.
Rob Hosking is a Wellington-based freelance writer specialising in political, economic and IT related issues.
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