Australia, the UK, and many European countries have taken steps to improve the financial sustainability of their pension schemes, most commonly by raising the retirement age.
John Key refused to discuss the possibility of making changes while he was in office.
That obstacle is no longer there and we need to start the debate.
The commission is also recommending a number of changes to KiwiSaver, to make this a more effective vehicle for retirement saving.
These include increasing the minimum contribution from 3 per cent to 4 per cent, allowing people to make contributions at a higher percentage than currently, and allowing people over the age of 65 to join.
To help fund NZ Superannuation, the commission recommends that Government resume contributions to the NZ Superannuation Fund.
Presently, new migrants are eligible for NZ Superannuation after 10 years, and the commission recommends increasing this to 25 years.
As well, it recommends removing the option for non-qualifying partners of superannuitants to also receive a pension.
The bottom line is we all need to take more responsibility for our own retirement.
- Liz Koh is an authorised financial adviser. The advice given is general and does not constitute specific advice. A disclosure statement is free. Call 0800 273 847. For free e-books, see moneymax.co.nz and moneymaxcoach.com.
