United Future leader Peter Dunne is proposing allowing people to retire earlier and receive lower superannuation payments or later with higher payments.
“Kiwis would then be able to manage their retirement age and lifestyle – choices they currently do not have – and it would be cost neutral with the current scheme,” Mr Dunne said in launching the party’s superannuation policy.
“Each year below 65 that superannuation would be claimed down to 60, would see a small reduction, and each year over 65 up to 70, it would be enhanced.
He said the figures used would make it cost-neutral and he’s also proposing making Kiwisaver compulsory to address the long term sustainability of superannuation.
“The sustainability arguments around superannuation, and whether it should be 65 or 67, then become redundant,” he said.
“People can then do their own maths and work out what works best for them based on their lifestyle and aspirations,” Mr Dunne said.
It will be interesting to see Act’s reaction to this. The now defunct 2020 Taskforce, which was chaired by Don Brash who is now Act’s leader, also suggested that people be able choose to delay receiving a pension and then get higher payments than those who retired earlier.
If it’s not going to cost any more it is an idea worth considering.
Our longest serving staff member has been receiving superannuation for 16 years and is still working fulltime at 81. Another is 79 and one is 65. I think all would have chosen to postpone receiving superannuation in return for higher payments later had they been able to.
Conversely, people not enjoying their work and/or in poor health might welcome the option of retiring earlier, albeit at a lower rate of superannuation.
Opting to receive superannuation doesn’t necessarily retiring though so this policy would also enable older people who are still happy to work to top up their wages with superannuation from the age of 60.
Providing it’s affordable, this policy might also take pressure off the debate on the need to raise the age at which people are eligible for superannuation by allowing them some choice.