Link pension to health expectancy: Report
The pension age must rise and be linked to health expectancy, the New Zealand Initiative has argued in a new report.
Tuesday, December 4th 2018, 1:37PM
Research fellow Jenesa Jeram said the change was needed to maintain a relevant relationship between retirement and receipt of superannuation.
“NZ Super is a success story. New Zealand has one of the lowest elderly hardship rates in the world, and the costs of our universal pension are lower than many OECD countries. Specific features of the model contribute to its success but keeping the eligibility age at 65 is not one of them,” she said.
If trends continue people would be living longer, retiring later, and drawing on super for a longer period of their lives.
“The pension age is the same as it was in 1898 when fewer than half of all males were expected to live that long. Times have changed, and the pension age is a historical artefact that should be reviewed.
“Our tax and welfare system is generally progressive: money is transferred from the rich to the poor. This could be reversed as the population ages and fewer people work, so that more money is transferred from the working poor to the relatively rich.
“The public should be aware that maintaining the pension age comes at an increasing cost, when that money could go towards people in real hardship.”
She said changes would need to be signalled in advance so people could prepare.
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