2013 Review of Retirement Income Policies

Background papers

These papers commissioned for the 2013 Review of Retirement Income Policies, and selected papers from previous reviews, are the views of each author and don’t necessarily reflect the view of the Retirement Commissioner. All 2013 papers have undergone two peer reviews except where indicated.

• History and trends

  New Zealand's first age pension was introduced in 1898. Since then, our system of retirement income has evolved and adapted as times have changed. The papers below describe the broad global, national, financial and historical context for today's retirement income policies.

  The History of Retirement Income in New Zealand to Date (PDF 699.68 KB, Mar 2013)

  The History of Retirement Income in New Zealand to 2008 (PDF 433.9 KB, Dec 2012)

  Implications of Global Trends for Retirement Income Policy (PDF 742.23 KB, Mar 2013)

  The Impact of and Issues Arising from the Global Financial Crisis (PDF 451.45 KB, Dec 2012)

  Longevity Trends and their Implications for the Eligibility for New Zealand Superannuation (PDF 986.15 KB, May 2013)

• International comparisons

  New Zealand is not alone in addressing issues related to retirement income policies. Other countries have responded in different ways but there are also similarities. These papers offer some international comparisons, with a particular focus on Australia and New Zealand.

  Comparison of the New Zealand and Australian Retirement Income Systems (PDF 846.4 KB, Mar 2013)

  Retirement Security and Financial Literacy in New Zealand: Policy Lessons from Abroad (PDF 297.92 KB, Mar 2013)

  The Financial System Post the GFC: Roles, Regulation and Responsibilities (PDF 289.39 KB, Mar 2013)

  What’s Happening to Pension Ages in OECD Countries (PDF 143 KB, Sep 2013)

• Current system

  This section describes New Zealand's current system of retirement income, including the contribution of wider policies and programmes, and outlines the key outcomes achieved by the system.

  New Zealand's Current Retirement Income Policies (PDF 652.01 KB, May 2013)

  Material Wellbeing of Older New Zealanders (PDF 676.23 KB, Aug 2013)

  Contribution of Wider Policies and Programmes (PDF 339.02 KB, Mar 2013)

  The Influence of an Older Population Structure on Public Finances (PDF 375.59 KB, Sep 2013)

  Overall Sustainability of New Zealand's Retirement Income Framework (PDF 345.58 KB, Jan 2013)

  Disabled People and Provision for Retirement (PDF 115.29 KB, Mar 2013)

  From the Macro to the Micro of New Zealand Savings (PDF 382.13 KB, Sep 2013)

  Tax Matters (PDF 199.69 KB, Apr 2013)

  Note: The above paper received just one peer review.

   

• Intergenerational impacts

  This paper analyses the consequences of expanding New Zealand's retirement income framework on a save-as-you-go basis rather than on a pay-as-you-go basis.

  To Save or Save not: Intergenerational Neutrality and the Expansion of New Zealand Superannuation (PDF 548.49 KB, May 2013)

• KiwiSaver

  KiwiSaver is now over seven years old, and as time goes on the scheme will assume greater importance in the retirement income framework. This paper gives an update on how things are progressing with KiwiSaver.

  The Place of KiwiSaver in New Zealand's Retirement Income Framework (PDF 907.13 KB, Mar 2013)

  Superannuation and KiwiSaver Clauses in Collective Employment Agreements (PDF 233.65 KB, Jul 2013)

• New Zealand Superannuation Fund

  The Role and Performance of the New Zealand Superannuation Fund (PDF 209.67 KB, Apr 2013)

• Financial literacy in retirement income

  The Case for Financial Literacy (PDF 609.12 KB, Apr 2013)

• Housing

  Housing is a crucial pillar of New Zealand's retirement income policies. This paper discusses a number of issues which will need to be addressed if New Zealand Superannuation is to continue to provide a broadly adequate income for older New Zealanders.

  Housing Assets (PDF 942.16 KB, Sep 2013)

  Note: The above paper received just one peer review.

• Employment

  Working longer to boost retirement income is an option taken by many older New Zealanders, and our workforce participation rate for over 65s is very high by international standards. This paper describes how employment is an important element of New Zealand's retirement income framework.

  Workforce Participation of Older Workers (PDF 1.02 MB, Mar 2013)

• Women’s retirement income prospects

  We commissioned research into women’s retirement income prospects to feed into the 2013 Review. 

  Women’s financial wellbeing and net worth in retirement are influenced by a variety of contextual factors and by decisions that women make during their life spans. Women tend to face more constraints than men in accumulating adequate wealth for retirement and on average, women’s net worth is lower than men’s.

  Looking forward there is a risk that inequality of outcomes could be exacerbated with the increasing significance of KiwiSaver – a workplace-based savings scheme – for New Zealanders’ retirement income.

  Factors likely to impact on women’s financial wellbeing in retirement

  Based on preliminary research, the Commission has hypothesised ten factors thought most likely to carry risks of negative impact on women’s financial wellbeing in retirement, and is working with the Treasury and Ministry of Women’s Affairs to test these hypotheses.

  The ten factors thought most likely to carry risks of negative impact on women’s financial wellbeing in retirement are:

  1. The family, neighbourhood and community the woman was born into

  2. Education including subjects studied, specific training, paid work experience while studying and level of access to on-going training and professional development while in the workforce

  3. Visible and invisible structural factors in the workplace including pay structures and lack of flexibility that inhibit the promotion of women

  4. Paid work response to breaks in earning including attitudes to health conditions, timing of family formation, child bearing, elder care and other life-cycle choices

  5. The ages at which women are most available to focus on paid employment and the nature of paid employment opportunities and earnings level, i.e. the ease and timing of entering and leaving the workforce (e.g. in specialist professions)

  6. The nature of the household unit (e.g. solo parent households, the majority of which are headed by women) family formation, career development, support from marriage/partnership, other family, friends, whānau and the community

  7. The endowment a women may have been provided with or may take away from a relationship breakup

  8. The extent to which savings schemes address life cycle changes in a fully gender neutral manner

  9. Level of home ownership and other asset accumulation, levels of debt and skills at debt management, net worth and retirement prospects taking into account greater average longevity for women

  10. A variety of cultural and ethnic factors that may exacerbate disadvantages for women

  Key issues: an updated literature review

  A summary of key issues from the literature on women’s retirement income (Heathrose Ltd).

  Updated Literature Review

  Four women’s stories: a comparative analysis

  A comparative analysis of women’s retirement income using the stories of four women in the workplace (Heathrose Ltd)

  Experiences of the Workplace: Four Women’s Stories

  How gender-neutral are New Zealand superannuation schemes?

  To what extent do individual superannuation schemes in New Zealand address needs for retirement income in a gender-neutral manner? (M. Dwyer)

  Gender Neutrality of Superannuation Schemes

  Property (Relationships) Amendment Act 2011: Are separated women more disadvantaged than men?

  Research into whether separated women are more disadvantaged than men by the provisions of the Property (Relationships) Amendment Act 2011 was carried out by members of the Faculty of Law the University of Otago. A key finding is that the law on division on relationship property seems to be working well and that social reform, rather than legal reform, is required.

  Property (Relationships) Amendment Act 2011: Are Separated Women More Disadvantaged than Men?

  The impact of cultural factors on women's retirement income

  Many of the factors thought to disadvantage a woman’s ability to accumulate net worth are universal. Issues such as pay structures, breaks in earning and single parenting are not the preserve of any culture. However, the financial wellbeing of ethnic women in New Zealand can also be affected by traditional values, roles and expectations. There is often a tension between these and “Western” ways of doing things, particularly in respect of retirement savings.

  Impact of Cultural Factors on Women's Retirement Income

• Income and expenditure in retirement

  Many New Zealanders will accumulate financial resources to help sustain them when they retire from paid employment. However, there is debate on exactly how much is needed for an adequate retirement. Links below show three different scenarios on levels of spending in retirement.

  Expenditure in Retirement (PDF 374.28 KB, Aug 2013)

  2013 New Zealand Retirement Expenditure Guidelines

  A Minimum Income for Healthy Living – Older New Zealanders

  Less attention is given to how those resources are actually managed in retirement. Click on the links below for discussion on issues surrounding decumulation and managing income in retirement.

  Assuring Retirement Income (PDF 190.45 KB, May 2013)

  Managing Assets and Income in Retirement (PDF 322.61 KB, Jan 2013)

  The Retirement Policy and Research Centre has also published a paper: 

  Financing of Long-term Care and Long-term Care Insurance for the Aged: A Literature-based Comparison of Seven OECD Countries

2013 Review submissions

• Submissions and opinions

  The 2013 review of retirement income policies discussion document was published in October 2013.

  • Focusing on the Future: A discussion document (PDF 2.55 MB, Oct 2013)

  The recommendations were debated publicly and we sought feedback in preparation for submitting the final review to Government on 12 December 2013.

• Responses to Focusing on the Future

  Below are some of the comments received.

  • Dunedin Community Law Centre and Law For Change (PDF 233.35 KB, Nov 2013)

  • Financial Services Council (PDF 826.59 KB, Nov 2013)

  • Government Superannuitants Association (PDF 820.43 KB, Nov 2013)

  • Grey Power New Zealand Federation Incorporated (PDF 450.53 KB, Nov 2013)

  • Guardians of New Zealand Superannuation (PDF 68.63 KB, Nov 2013)

  • Dr Judith Davey (PDF 154.93 KB, Nov 2013)

  • KASPANZ (PDF 275.87 KB, Nov 2013)

  • New Zealand Bankers' Assocation (PDF 247.03 KB, Nov 2013)

  • New Zealand First (PDF 161.76 KB, Nov 2013)

  • New Zealand Council of Trade Unions (PDF 188.34 KB, Nov 2013)

  • P M W Van Bussel (PDF 31.75 KB, Nov 2013)

  • The Retirement Villages Association of New Zealand Inc. (PDF 489.11 KB, Nov 2013)

  • Robert Stephens (PDF 200.08 KB, Nov 2013)

• Formal submissions

  The closing date for initial submissions to the 2013 review of retirement income policies was 31 May 2013. Below are some of the submissions received.

  • Age Concern NZ (PDF 237.35 KB, Jun 2013)

  • ANZ Wealth (PDF 84.79 KB, Jun 2013)

  • BNZ (PDF 133.62 KB, Jun 2013)

  • Boyd Klap (PDF 203.8 KB, May 2013)

  • BT Funds Management (NZ) Limited and Westpac New Zealand Limited (PDF 82.14 KB, Jun 2013)

  • Carers NZ (PDF 249.65 KB, May 2013)

  • Consumer NZ (PDF 253.13 KB, Jun 2013)

  • Crown Financial Ministries New Zealand (PDF 88.86 KB, May 2013)

  • Professor David Mayes (PDF 179.25 KB, Jun 2013)

  • Dunedin Community Law Centre (PDF 514.71 KB, Jun 2013)

  • Family Centre (PDF 199.08 KB, Jun 2013)

  • Financial Markets Authority (PDF 2.5 MB, Jun 2013)

  • Financial Services Council (PDF 538.69 KB, Jun 2013)

  • First NZ Capital (PDF 158.73 KB, Jun 2013)

  • Government Superannuitants Association (PDF 211.73 KB, May 2013)

  • Grey Power New Zealand (PDF 568.17 KB, May 2013)

  • Hamilton Budgeting Advisory Trust (PDF 195.58 KB, Jun 2013)

  • Human Rights Commission (PDF 196.12 KB, Jun 2013)

  • KiwiSaver, Annuities & Superannuation Protection Association New Zealand Incorporated - KASPANZ (PDF 426.79 KB, May 2013)

  • McGuinness Institute (PDF 3.86 MB, Jun 2013)

  • Mercer (PDF 124.46 KB, Jun 2013)

  • Michael Littlewood on "To save or to save not" (PDF 247.78 KB, May 2013)

  • National Council of Women of New Zealand (PDF 390.03 KB, Jun 2013)

  • New Zealand Bankers' Assocation (PDF 645.66 KB, Jun 2013)

  • New Zealand Council of Trade Unions (PDF 331.26 KB, Jun 2013)

  • New Zealand Income Guarantee (PDF 70.66 KB, May 2013)

  • New Zealand Nurses Organisation (PDF 247.58 KB, May 2013)

  • New Zealand University Students' Association (PDF 649.31 KB, Jun 2013)

  • Professional Advisers Association (PDF 466.48 KB, Jun 2013)

  • Reserve Bank of New Zealand (PDF 8.67 KB, Jun 2013)

  • Retirement Policy and Research Centre (PDF 191.65 KB, May 2013)

  • Roger Hurnard (PDF 610.1 KB, May 2013)

  • Southern Cross Healthcare Group (PDF 97.9 KB, Jun 2013)

  • Vaiola P I Budgeting Service (PDF 257.28 KB, Jun 2013)

  • Women in Super (PDF 151.97 KB, May 2013)

  • Workplace Savings NZ (PDF 149.38 KB, Jun 2013)