Small tweaks to New Zealand’s universal pension model are being recommended in a newly released report by think tank The New Zealand Initiative.
Research Fellow Jenesa Jeram suggests the pension age must rise in the new report tiled Embracing a Super model: The superannuation sky is not falling.
She told RadioLIVE New Zealand’s Super is a success story.
“We know that currently we have a system that works really well. There are lots of things to celebrate; it is relatively cheap compared to a lot of other countries, and it’s likely to be cheap going into the future, as well.
“It’s simple to administer because it’s universal and it keeps the elderly out of poverty,” Ms Jeram explained.
However, she believes the problem identified in this report is not about affordability but the use of public money.
“We need to stop talking about whether or not Super is likely to be affordable in the future, but whether it is the most effective use of money.”
If trends continue people will 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 artifact that should be reviewed.”
Listen to the full interview above.
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