by Susan Edmunds
The terms of reference for the three-yearly review of retirement income policy were yesterday tabled in parliament and include several new additions from the last time the policy was reviewed, in 2013.
They include how retirees manage their private savings through withdrawal patterns, annuities, reverse mortgages and how low interest rates affect retirees' management of their money.
Maxwell will produce a report that will look at the impact policies have on current and future retirees.
But she said there was nothing surprising in the terms of reference. Everything that was included was already under examination by the commission.
She said the issue of decumulation in particular was signaled as one that needed attention in the 2013 review.
A paper on decumulation was prepared by the Commission late last year and would form part of the review this year.
“I do see the bigger broader issue of decumulation being the focus rather than just annuities. How people accumulate and then decumulate is the key."
She said people needed to have options for what they did with their money, understand their longevity and get good advice on their decisions.
Between April and October, the Commission for Financial Capability will focus on a theme of the review each month and carry out events, focus groups, podcasts, surveys and conduct other public engagement exercises on each subject.
The result of the seven months’ engagement would be a report delivered in December, Maxwell said.
She said it was important that taxpayers got behind the work the CFFC was doing. “They are the single most important person in the entire equation because they’ll be paying for wherever we get to.”
Through February, March and April the focus would be on accumulation, she said, followed by decumulation in May, then on to other topics such as KiwiSaver, the ageing workforce and other topics the commission was directed to discuss in the terms of reference.
The decumulation month would include looking at new products such as Lifetime Income and other advances made by any other providers who were considering launching.
She said: “There’s a lot we already know that we don’t need to keep saying… what’s important is what does the public know and think about this and what do they believe is equitable for New Zealanders? If we can’t get the public over the line, we certainly can’t’ get politicians over the line.”
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