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[The Wrap] Thanks for the gift Peter

The good news this week is that it looks like my state-funded pension is all but guaranteed (in the not too distant future).

Friday, January 31st 2020, 6:49PM 1 Comment

by Philip Macalister

I'd always planned on not getting NZ Superannuation when I turn 65, but now it looks certain I'll be getting it later on this decade. 

Seeing the interim Retirement Commissioner, Peter Cordtz say this week that the age of eligibility for NZ Superannuation doesn't need to be increased from its present age of 65 was somewhat of a surprise announcement.

To me the case for raising the age of eligibility seemed totally logical; even if our politicians don't have the balls to make such a call.

One of the most curious aspects of the report released this week is it has come out under the hand of the interim Retirement Commissioner, just weeks before a new one, Jane Wrightson, steps into the role. The assumption would be that she agreed with the report; if not then it nearly falls into the poisoned chalice category.

The question was asked in a comment to our original story, what has changed to warrant this u-turn. If the following comment is the reason, then it's pretty flaky.

“It was apparent from submissions and focus groups that younger New Zealanders, as well as their parents and grandparents, are concerned that NZ Super will not be available to future retirees, or at adequate levels. We received a lot of comments to the effect that ‘Super won’t be there for us’,” says Cordtz. “This uncertainty is causing unnecessary stress, and we think should be put to bed so New Zealanders can have certainty that NZ Super will provide a stable level of state support for them to plan around."

That to me says there needs to be better education and planning.

The report, which is done every three years, is quite different to previous ones. Overall there were 19 recommendations, but other than the age of eligibility, not many major or radical ideas. Perhaps one of the more interesting is that there should be state funding for Mindful Money. This is a website established by former Green MP Barry Coates to encourage people to switch to ethical KiwiSaver schemes.

I thought this comment in the report was rather ironic, considering the FMA's stand on commissions and potential conflicts of interest.

"Mindful Money is currently running as a charity, receiving modest commissions from referrals to a small number of schemes. While the charity says this does not affect its recommendations, this proposal would replace its business model, with the aim of removing any possibility of perception of conflicts of interest that could arise from remuneration from member referrals, which would need to cease."

Don't get me wrong; I think Mindful Money is a good tool – what's more interesting is that it has been singled out for support in this report. 

Of course the other big, related, news this week is the announcement of the date for this year's general election.

It's likely to be an election campaign where issues directly relating to financial services just don't feature.

NZ Super and the retirement age is off the table. Prime Minister Jacinda Arden has said no increase in age of eligibility on her watch. National had proposed an increase but it was so far in the future it was close to meaningless.

Likewise, the prospect of a capital gains tax is truly well-buried. 


Tags: KiwiSaver NZ Super The Wrap

« Wannabe trust and fund administration company in receivershipInsurers argue cutting commissions will lead to poor customer outcomes »

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Comments from our readers

On 1 February 2020 at 9:52 am dcwhyte said:
Phil - you’re point about Election Year is the common factor in the retirement age and CGT issues. The Report looks to me like a piece devoid of empirical research and fact-based evidence. Par for the course for financial services analysis - FSC publications being the outstanding exceptions and hopefully.a similar standard of analysis from the FANZ research initiative.

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AIA 4.55 2.55 2.69 2.79
ANZ 4.44 3.15 3.25 3.39
ANZ Special - 2.55 2.69 2.79
ASB Bank 4.45 2.55 2.69 2.79
Bluestone 3.49 3.49 3.49 3.49
BNZ - Classic - 2.55 2.69 2.79
BNZ - Mortgage One 5.15 - - -
BNZ - Rapid Repay 4.60 - - -
BNZ - Std, FlyBuys 4.55 3.15 3.29 3.39
BNZ - TotalMoney 4.55 - - -
CFML Loans 4.95 - - -
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China Construction Bank 4.49 4.70 4.80 4.95
China Construction Bank Special - 2.65 2.65 2.80
Credit Union Auckland 5.45 - - -
Credit Union Baywide 5.65 3.95 3.85 -
Credit Union South 5.65 3.95 3.85 -
First Credit Union Special 5.85 2.95 3.45 -
Heartland 3.95 2.89 2.97 3.39
Heartland Bank - Online - - - -
Heretaunga Building Society 4.99 3.85 3.95 -
HSBC Premier 4.49 2.45 2.60 2.65
HSBC Premier LVR > 80% - - - -
Lender Flt 1yr 2yr 3yr
HSBC Special - - - -
ICBC 3.69 2.45 2.65 2.79
Kainga Ora 4.43 2.93 3.07 3.24
Kiwibank 3.40 3.30 3.54 3.54
Kiwibank - Offset 3.40 - - -
Kiwibank Special 3.40 2.55 2.79 2.79
Liberty 5.69 - - -
Nelson Building Society 4.95 3.45 3.49 -
Pepper Essential 4.79 - - -
Resimac 3.39 3.35 2.99 3.35
SBS Bank 4.54 3.05 3.19 3.25
Lender Flt 1yr 2yr 3yr
SBS Bank Special - 2.55 2.69 2.75
The Co-operative Bank - Owner Occ 4.40 2.55 2.69 2.79
The Co-operative Bank - Standard 4.40 3.05 3.19 3.29
TSB Bank 5.34 3.29 3.45 3.59
TSB Special 4.54 2.49 2.65 2.79
Wairarapa Building Society 4.99 3.55 3.49 -
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Westpac - Offset 4.59 - - -
Westpac Special - 2.55 2.69 2.79
Median 4.55 3.00 3.13 3.02

Last updated: 21 September 2020 10:48am

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