Super report sparks sustainability debate

From left, Matt Nuttall, 20; Steve McLennan, 42; Elizabeth White, 55 are unsure about the future of Super when they retire. Photos / Alan Gibson

Financial body advocates KiwiSaver Plus scheme for future peace of mind

A report by the Financial Services Council has rekindled the superannuation debate.

The council argues for urgent changes to super, saying the present scheme is unsustainable unless either the age of eligibility or taxes are increased.

It proposed a KiwiSaver Plus scheme that would encourage people to save 10 per cent of their incomes, with employees and employers contributing half each and the savings scheme being introduced gradually over a decade. An increase in private savings would give people enough to live on between the age of 65 and the age of eligibility for superannuation.

Labour, which supports gradually increasing the superannuation age to 67 and making KiwiSaver compulsory with greater contributions, has called the report a "wake-up call" to Prime Minister John Key. But he is sticking by his promise to keep the retirement age at 65.

NZ First leader Winston Peters has slammed the report as "shonky work" and the authors as covertly working as "lobbyists for the pension industry".

Three views from different generations

Generation Y
Max Nuttall, 20

Do you believe you'll have NZ superannuation when you retire?
I hope so. It's going well and they should leave it alone.

Do you think the super age will stay at 65?
I hope they do and I think they should keep the age at 65, it's late enough as it is.

People aren't retiring too late at the moment anyway - a few people I work with have just retired and they're only around 50 years old.

Have you started your own savings plan?
Yes. I'm on KiwiSaver and so far I've managed to save about $1500.

Generation X
Steve McLennan, 42

Do you believe you'll have NZ superannuation when you retire?
From the Government? I don't think so, no. I don't trust the Government not to put it back in their own coffers, so I think we are going to be up for some serious changes.

Do you think the super age will stay at 65?
I don't think it's sustainable, it's got to go up - I think it would be up in the mid-70s, because people are living longer.

But it's extremely worrying and we are going to have inter-generational warfare. We've had the baby-boomers lump a lot of debt on to younger generations and I think they are going to react badly when they start voting ... whenever that is.

Have you started your own savings plan?
No, I haven't started my own savings plan. We have investments in properties but I wouldn't call that a plan.

Baby Boomer
Elizabeth White, 55

Do you believe you'll have NZ superannuation when you retire?
I certainly hope so.

Do you think the super age will stay at 65?
I'm not sure but I think it could go up for people who don't have physical jobs. Some people burn themselves out because they have physical jobs, but if they're in office work

I think they could go on. It could go up to say, 67 or 68.

Have you started your own savings plan?
No, I don't have a savings plan. I've saved nilch.