Govt responds to superannuation report

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The government has officially responded to the Periodic Review Group’s (PRG) report on savings in New Zealand, 10 months after the report was presented.

Wednesday, October 6th 2004, 12:22PM

In the document released yesterday it is clear action has been taken on some of the issues raised by the PRG, but many others have just been noted or deferred until priorities permit.

One of the key points is that the government does not want the Retirement Commission to take responsibility for co-ordinating the ongoing monitoring of risks and opportunities to private provision.

It agrees there is need for monitoring but is proposing that it is done by central government departments such as the Ministry of Social Development (MSD).

In its response the government says that MSD will lead an exercise to consider and advice on the appropriate governance and administrative arrangements to take the issue forward and to coordinate retirement income research and policy development.

The government also sees “merit” in establishing a research fund to better understand household savings behaviour. It says this will be done as part of the MSD work.

However, it rejected the idea of repeating the Household Savings Survey saying that the Survey of Family, Income and Employment will collect the necessary information.

On the plus side the government has established the Savings Product Working Group to help develop workplace savings. The Harris report, which came from the group and was released in August is currently open for submissions.

The Retirement Commission is supported by the government, however it misses out on more funds to do promotional campaigns for its Sorted website.

But a pilot project is being set up where the commission provides face-to-face or telephone information support to go alongside Sorted.

Another unknown task is that the commission has “action in hand” to establish a methodology to make fees for savings products more transparent.

A number of the PRG’s suggestions on tax are being covered in the taxation review of savings.

The Minister for Social Development and Employment Steve Maharey says the Retirement Commissioner will monitor and report annually on the progress of the work programme, with the government providing an extra $90,000 funding this financial year for her increased monitoring and review roles.

“The government will also ask the Retirement Commissioner to review retirement income policy by the end of 2007. The review will be required by law to be repeated every three years after that date.”

The PRG has previously been conducted every six years.

To read the Government's full response to the PRG report Click here

« Maharey says Govt implementing PRG recommendations

Saving for retirement: New evidence for New Zealand »

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