Redesigning NZ Super

from the Retirement Policy and Research Centre has a commentary on redesigning NZ Superannuation. He says (and I agree) that we should not just look at one issue in isolation or just the cost.

He  eight design features that should be agreed on. They are:

  1. Universal or means-tested (I favour means-tested if the administrative costs of doing so are not prohibitive)
  2. Age of entitlement (I favour increasing it and tying it to life expectancy)
  3. Residency test – how long should someone live here to quality. The current is ten years and I think it should be higher. It used to be 25 years.
  4. The level. Currently is 43% of the net average wage for a single person. Set at 66% of  the after-tax national average wage for a couple.
  5. How to revalue? Is indexed to both CPI and the average wage.
  6. How to pay for it? Pay as you go and partially pre-funded. Should it be both? What should the mix be?
  7. Payments to single people? Why does a married couple get less than two singles living together?
  8. Overseas pensions? The rules for deducting overseas pensions are inconsistent

ACT's proposal to have an expert panel devise a number of schemes that would go to a vote, would be one way we could have a debate on, and decide these issues.

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