News About Debate About Super Solutions
Tax rates will have to rise by as much as 28% to sustain the New Zealand Superannuation system in its current form, the Financial Services Council (FSC) is warning.
The council, whose members manage almost NZ$80 billion in savings, is the latest party to sound the alarm about a demographic timebomb which threatens to undermine the security of New Zealand’s cherished pension system.
Kiwis aged 65 and older will by 2015 outnumber younger New Zealander’s by 60%.
The Financial Services Council, in a report on the retirement and savings, predicts that the cost of funding the New Zealand Super will rise to 12% of GDP unless steps are taken soon to increase private savings along with other policy adjustments.
According to its modelling, the current 17.5 % income tax rate would rise to 22 %, the 33 % rate to 42 %, GST from 15 % to 19 %, and the corporate rate from 28 % to 36 %.
Interest.co.nz June 11, 2012
National’s under growing pressure to re-think its stance on the retirement age following a report warning of a pending crisis.
The Financial Services Council says Kiwis are living longer and tax rates will need to rise by almost a third later this century to continue funding super at 65.
It says around half those born last year are expected to make it to 100.
RadioLIVE / 3 News 11 Jun 2012
A new survey shows 80% of New Zealanders want political parties to hold discussions on future superannuation costs.
The Horizon Research survey was commissioned by the Financial Services Council, which represents the savings industry.
It asked 2500 people whether they supported political parties in Parliament entering into talks on how New Zealand can provide secure retirement income in the future.
Forty-seven percent said they strongly support multi-party talks on the subject, a third merely supported them.
Less than 2% oppose the idea.
Radio New Zealand News 10 June 2012
The financial impact of New Zealand’s ageing population could dwarf the global financial crisis unless Government takes steps now to address the problem, superannuation specialists are warning.
In a discussion document, entitled “Security Retirement Incomes“, Mercer New Zealand (a default KiwiSaver provider) calls on Government to raise the age of eligibility for New Zealand Superannuation from 65 to 67. It also suggests Kiwis be encouraged to defer retirement to age 70, as well as introduce a plan for the “decumulation” phase of KiwiSaver, whereby retirees spend their KiwiSaver funds
Interest.co.nz June 5, 2012