The NZ Herald uses some research from Mercer today to refresh an important question: Should the Government increase the age of eligibility for superannuation?
Alf’s answer is yes (but he will tender it only in the privacy of his own home).
His answer for public consumption (based on his finely honed political survival instincts) is to leave the super eligibility limit where it is.
Actually, Alf is on much the same wavelength (privately) as David Farrer at Kiwiblog.
I have no doubt some future Government will move to increase the age to 67. The move from 60 to 65 was a transition that took ten years to do (off memory). So a transition from 65 to 67 probablyonly needs a 5 to 7 year lead in – even though longer is always better.
The crunch starts to come around 2030 so I would expect whoever is in Government in around 2020 – 2023 to start to make the move to a later retirement age.
Personally it would be desirable that at the time of that change, some sort of automatic indexing is looked at, maybe linked to average life expectancy.
The Herald article, for what it’s worth, reports the results of a study which found lifting the age of eligibility for superannuation to 67 could save future taxpayers at least $100 billion by 2061.
Consulting and investment services company Mercer says the double whammy of an ageing population and global financial crisis has highlighted the urgent need for the Government to address the adequacy of retirement savings, and reduce reliance on NZ Super.
Lifting the eligibility age to 67 and removing disincentives to taking up annuity products such as Kiwisaver are two solutions that could potentially address the problem, it says.
But our Bill English the other day was making mileage in the House over a report of comments made by David Cunliffe, who told the “Mood of the Boardroom” meeting in Auckland on the superannuation issue: “Nor, if you listen carefully, have I closed the door on re-examining questions of the age of entitlement.”
While we can kick Cunliffe and Labour around on the matter, Alf will be keeping quiet about what he really thinks.