New opportunities in super
One of the big new potential opportunities for advisers in the retirement savings area is the relatively untouched area of corporate superannuation.
As explained in the accompanying article from AXA, superannuation is made up of three tiers. Tier one being the state pension (or NZ Super colloquially known as “65 at 65”). The middle tier is providing savings vehicles in the workplace and the third is private voluntary provision. Until recently all the emphasis has been on tiers one and three. The government has always provided the tier one end – which is the equivalent of a state funded annuity. While this has been an area of great political debate, there is now a reasonable degree of certainty around its existence, if not its funding.
All political parties, except Act, say that there will be no change in entitlements for people who are already retired or nearing retirement. The picture isn’t so clear for those further out from retirement.
National party leader Don Brash says that “some time around the year 2020 the age of entitlement is going to be an issue, regardless of which party is in government.” The other area are where there has been huge efforts to make improvements is the tier three, or private provision. Indeed much of the financial services industry is built around encouraging New Zealanders to make private provision for retirement.
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