Pensioners to sue over lost super

Disgruntled pensioners upset over losing $185 million each year in superannuation payments to the Government are preparing to take their fight to the courts.

Moves are under way to file a class action against the Government over legislation that leads to the super entitlements of more than 52,000 pensioners and their spouses being slashed because they receive an overseas pension.

But the law makes no distinction between taxpayer-funded pensions such as New Zealand super and contributory pensions schemes in the US, Canada and Britain, where workers have a percentage of their own income paid into a Government-managed fund.

Appeals to exempt pensions comprised of personal work savings have met with inaction, and the malcontents - which include New Zealanders who have worked overseas, long-settled American, British and Dutch immigrants and their spouses - are getting fed up.

Spokesman Chris Arnesen said more than 300 people had registered their interest in filing a class action against the Government while a nationwide petition calling for a full-scale parliamentary inquiry had already gained 3000 signatures with six weeks to go.

Mr Arnesen is approaching a big law firm to be their representative.

"At this stage I would prefer not to disclose the law firm we intend to approach. It will just be a preliminary inquiry. If they are not prepared to take our case, another firm will be approached."

A loose collective of affected pensioners formed last year after a series of public meetings and the launch of a website, nzpensionabuse.org.

Anger has slowly mounted because of a feeling the Government has done nothing, despite being aware of the problem for at least four years.

Reports prepared by Ministry of Social Development officials in 2001 and 2003 warned the then minister, Steve Maharey, and in the later report, Finance Minister Michael Cullen, of problems with New Zealand super.

The report included warnings that a number of countries - including the US, Germany, Switzerland and Austria - were refusing to enter into social security agreements with New Zealand because of this issue.

Officials even recommended options that would allow those who had worked in New Zealand all their lives - often cited as likely to be disadvantaged by any changes - to keep their full super, while those with overseas pensions would get a proportional entitlement based on the number of years worked in New Zealand.

Grey Power president Graham Stairmand said the issue has been simmering for a number of years. About 46,000 Grey Power members are believed to be affected.

"There's been quite a number of our members who are quite adamant about the fact that they should get it."

The office of Social Development Minister David Benson-Pope had not heard of any class action suit but said the minister would not comment on matters involving legal action.