Life expectancy and superannuation

One of the reasons given for needing to increase the age of eligibility for New Zealand’s universal superannuation is the baby boomer bubble that is will raise the number of people who qualify substantially.

Another factor is life expectancy – with more of us living longer that lengthens the time we are paid Super.

Here are life expectancy trends from Statistics New Zealand:

LifeExpectancyAtBirth

This is god for showing improved life expectancy trends, but I have always been unclear what this means for someone born in the 1950-60s. Perhaps we had a higher chance of dying young than babies born now.

This trend gives a better idea of what our expectations are now (subject to life’s lotto):

LifeExpectancyAt65

See information about this data.

In 1977 the Muldoon introduced universal superannuation for everyone from 60 years old.

Then average life expectancy for a man was about 65+13 years (18 years of pension), and for a woman it was about 65+17 (22 years of pension).

The age of eligibility was raise to 61 in 1992 and gradually rose to 65 in 2001.

In 2001 average life expectancy for a man was about 65+17 years (17 years of pension), and for a woman it was about 65+20 (20 years of pension).

In 2013-15 average life expectancy for a man was about 65+20 years (20 years of pension), and for a woman it was about 65+23 (23 years of pension).

So people are on pensions on average about three years longer than at the start of the century. And life expectancy is predicted to keep improving so this will keep growing – unless the age of eligibility is increased.

44 Comments

  1. We’re more affluent, aren’t we?

    So what’s a few extra years of Super …?

    • Blazer

       /  March 7, 2017

      hey….whats with the short….post?

  2. David

     /  March 7, 2017

    Its quite amusing watching the media who have spent 8 years kicking Key over his pledge now trying to pick holes in English doing what they have constantly called for. Apparently the way he announced it is now the problem.
    Thankfully here at YourNZ we get some facts on life expectancy.

    • Blazer

       /  March 7, 2017

      its hardly a bold policy initiative.National have no immediate or even medium term game.Completely reactive and lacking any vision.

      • Brown

         /  March 7, 2017

        Unlike the left who have a vision of utopia that keeps playing out in places like Venezuela. National are pretty left leaning nowadays and maybe thats the problem with the lack of vision.

        • Blazer

           /  March 7, 2017

          forget Venezuela ,which is slowly being strangled by sanctions,because Chavez defied the bankers.Try Scandinavia, where Socialism is entrenched and where you will find countries that lead the world on indicies that count.

          • PDB

             /  March 7, 2017

            The Scandinavian countries are all free-market, pro-trade economies;

            “In response to Americans frequently referring to his country as socialist, the prime minister of Denmark recently remarked in a lecture at Harvard’s Kennedy School of Government,
            “I know that some people in the US associate the Nordic model with some sort of socialism. Therefore I would like to make one thing clear. Denmark is far from a socialist planned economy. Denmark is a market economy.”

            Norway, which has more extensive socialist policies than the others, is only able to do so because they are rich from having extensive oil reserves, being the fifth biggest oil exporter in the world (something the left would rule out tapping here).

          • Alan Wilkinson

             /  March 7, 2017

            Sweden – the happy socialist home of education vouchers and Ikea. Denmark – leads the world exporting windfarms and importing other countries’ tax. Norway – socialist nirvana based on oil and hydro electricity energy revenue.

    • duperez

       /  March 7, 2017

      It must have been a very gentle kicking since it didn’t move Key and Co. from an errant path.

      Errant? It must have been if Steven Joyce says that what they were proposing to do with superannuation is “right for New Zealand.” The implication has to be that what was going on was not good for us.

  3. could have been more ambitious, generation rent would like to see it kick in sooner to shaft their parents. (myself included, my folks could do without a year or 2 of super) could also means test it to 70, so the 65-70 bracket isnt an “entitlement” but covers manual laborer types who can hardly work, while protecting us from subsidising lawyers, doctors etc on a good wicket.

  4. Geoffrey

     /  March 7, 2017

    Something is being overlooked here. When I started working, my first pay packet had two forms of tax deducted from my gross pay: Social Security Tax and Income Tax. The former was paid into a substantial fund from which National Superannuation was drawn. The government decided that it would be more efficient if the two were rolled into one PAYE contribution and undertook to preserve the large Super Fund within the Consolidated Fund. It would seem that, over time, it got spent on other stuff. Not only that: the routine deductions from pay packets also got spent on other stuff. Now the current generation of MPs are telling us that having frittered away our investments made throughout our working lives, they cannot deliver on what we purchased. The language used however, carefully avoids any suggestion that it is what is owed. We are regretfully advised that it is just too expensive for us to be supported by the current generation..

    • NOEL

       /  March 7, 2017

      Lets use the PM as an example.
      28 years in the Parliamentary defined benefit scheme.
      Now as PM and additional 65,000 plus more corporate taxi and flight entitlements.
      He’s got what 10 years until retirement age at year 2027.

      Nah I think this whole thing is designed as a cop out so that Winston is boxed into a corner if there is a need for more than one coalition partner.

      • Kitty Catkin

         /  March 7, 2017

        Hardly a benefit scheme-I have yet to hear of a benefit that demands the hours worked by MPs and Ministers. The amount of travel they do is work related-if they had to pay for it, there wouldn’t be much left. Unlike the rest of us, they can’t wait for discount fares. If they are driven rather than driving, it’s because they are working, reading papers and so on as they travel. It’s not the easy ride that people like Zedd fondly imagine.

        • Blazer

           /  March 7, 2017

          you always go in to bat for M.P’s Mittycat….because a couple of them shook your hand and smiled at you.

          • Kitty Catkin

             /  March 7, 2017

            Change the record, the needle’s stuck on that one.

            Why do you find it so hard to believe that someone as involved with a party as my late husband was for many years would know the people in it ? It’s pathetic.

            • Blazer

               /  March 7, 2017

              I believe it,just don’t believe this so called common work ethic you flock on about.

            • Kitty Catkin

               /  March 7, 2017

              You obviously don’t believe it, or you wouldn’t keep accusing me of lying about it. It’s obvious that you have never had anything to do with politics or politicians or you would know that they are constantly on call. And that for an MP, there is no such thing as 9-5. Why do you think that people like Pam Corkery are one-term-wonders ? One MP was covered by others when she took time off, but refused to return the favour which didn’t make her very popular. I think that she was also one who had no idea about it would really be like.Another one-term-wonder.

            • PDB

               /  March 7, 2017

              Nanaia Mahuta……….

            • Kitty Catkin

               /  March 7, 2017

              I forgot her-but she’s a Mahuta, so will be an MP forever.

    • Geoff you are obviously from the same generation as me. Not only Social Security etc needs tobe considered in terms of what has been paid and provided by our generation and the two or three generations that preceded us in NZ. I invite the younger generations to consider the effort and capital needed and paid for to create the existing roads, railways, airports, sewerage , reservoirs, water reticulation, electrical reticulation and electrical plants, who paid for the houses, the buildings that house enterprises, the Churches, town halls etc etc. These are all part of the infrastructure of NZ that each of us has paid for throughout our lifetime in the full knowledge that our kith and kin will enjoy the benefits of our and our forefathers and mothers have built. It would be better if you all focussed on the future and how you can help make this a better place and at the same time preserve what is good about what we have. Don’t blame a Government for trashing our environment, or despoiling our waters and forests. People and animals do this. We need commonsense and a dedication to keep our Paradise working for the future.

      • My first suggestion BJ … don’t sell “the existing roads, railways, airports, sewerage, reservoirs, water reticulation, electrical reticulation and electrical plants” …

        Too late for some of it eh?

        And don’t elect a government that is going to do any more selling off …

  5. Alan Wilkinson

     /  March 7, 2017

    Two overlooked points:

    1. As the age of eligibility has been raised from 60, retiring taxpayers have spent more years paying for others.

    2. Life expectancy doesn’t equate to working ability. There are plenty of 85 year old women. Very few are employable. There has never been a campaign for women to work longer than 65 on the basis they will live longer and are therefore more capable.

    • Mefrostate

       /  March 8, 2017

      1. Boomers were a population bulge, so there were more of them to pay for fewer prior generations. The reverse is true for today’s workers.

      2. Relevant point. To me this is a good reason to divide super into a) a pension, tagged to a certain percentage of life expectancy, and justified on the grounds of retiring with dignity, and b) a disability benefit, for those in professions which cause the body/mind to become unsuitable for continued work before the age of a) above.

      • Alan Wilkinson

         /  March 8, 2017

        Not so much that Boomers were a population bulge but world wars and depression had reduced and delayed previous generation numbers as well as infrastructure and investment. Key was quite right that it’s far from clear that the future superannuation burden will be a problem given all the confounding factors including more people working past 65.

        • Alan Wilkinson

           /  March 8, 2017

          Of course the “crisis” if it really is one will have been caused by subsequent generations dropping and delaying their birth rate, not by the Boomers.

          • Blazer

             /  March 8, 2017

            they can’t afford kids and housing Al,the boomers are greedy and selfish,and a voting faction to maintain the status quo.As for Key he has no confidence in …projections….remember!

  6. PDB

     /  March 7, 2017

    Someone in the MSM should ask that political juggernaut Jacinda Ardern what she thinks should happen with Super? Having come out strongly in the past as saying the country had to ‘make the hard decision’ and raise it to 67 will she now change her mind and back Andrew Little?

    • Blazer

       /  March 7, 2017

      The argument is only about..when.

      • PDB

         /  March 7, 2017

        Not any more Blazer – Ardern has done a complete flip-flop and agreed with Little that it doesn’t need to go up anymore…….

        • duperez

           /  March 7, 2017

          Can you think of anyone else who has done a ‘complete flip-flop’ in this? 🙂

          • PDB

             /  March 7, 2017

            Key didn’t as he has gone without changing it as he said he would and English was never on board with not raising the age under Key so now he is PM he has done so………so no.

            • PDB

               /  March 7, 2017

              You have to remember Key decided he wouldn’t even look at the matter of raising the super age on his watch, most within National didn’t agree with that (including English) but as it never hit the table for discussion it wasn’t an issue. Now Key is gone they can do what they feel is needed.

              In comparison Andrew Little was always for not raising the super age (and retains the same stance) but Ardern, Parker etc are on record as being strongly for raising the super age. They are the only ones doing a complete backflip on the issue now they agree with Little.

            • duperez

               /  March 7, 2017

              So for political expediency the Cabinet and Caucus didn’t raise it? (Were you at the table to hear it not raised?)

              Bill English who so many touted as a very good Minister Finance, was the Deputy Prime Minister, thought there should be changes, knew there should be changes, was with “most within National” who didn’t agree with the status quo yet they bit their lips?

              Not only bit their lips, but recognised the Great Leader should not be challenged on it? Not only bit their lips, but recognised that he did not trust their expertise, knowledge and even gut feeling but subjugated that to his political whim. And I suppose put their political futures ahead of what they though was right.

              I realise it’s all just a game and staying in power by playing the populist cards is what makes one a winner. I hope you’re not another biographer then who is to tell us that Key was the Great Leader who had New Zealand’s best interests at his very heart.

            • PDB

               /  March 7, 2017

              It’s not under ‘Key’s watch’ that the superannuation age needed to rise, it is some time in the future, Key taking that off the table whilst dealing with more immediate economic concerns such as the GFC and earthquakes isn’t that unreasonable. Even if Key had put something in place during his term he (like English has done now) still would have needed to provide a decent time period before the policy kicked in which allows any successive govt to kick it into touch if they so want.

              Currently super ‘is’ at an affordable level/ GDP %, it’s when the projected population age shifts down the track that there is a perceived problem.

  7. PDB

     /  March 7, 2017

    After beating her in the last two Auckland Central elections Nikki Kaye gives Jacinda another kicking over her back-flip on raising the super age – note the poll 70% in support of Kaye…

    http://www.stuff.co.nz/national/politics/90138084/nikki-kaye-v-jacinda-ardern-gen-y-mps-at-odds-over-raising-the-pension-age

    Politically National are all over Labour who again find themselves on the wrong side of public opinion.

    • Blazer

       /  March 7, 2017

      yes,Northland,Mt Roskill and Mt Albert,sure showed that…..

      • PDB

         /  March 7, 2017

        Ummm, and Labour did what in Northland? (retaining the other two safe Labour electorate seats is you being silly).

        • Blazer

           /  March 7, 2017

          sorry my mistake there Pants.I was thinking Tai Tokerau.Northland was supposedly a ‘safe’ Nat seat…yes?

    • duperez

       /  March 7, 2017

      So the scenario you painted above about ‘Key’s watch’ means that is it reasonable for Nikki Kaye to accuse someone else of a back-flip?
      Kaye isn’t doing a back-flip because she didn’t have an opinion about superannuation because there was an earthquake in Christchurch?

      • PDB

         /  March 7, 2017

        Now you are being silly – Key ruled out even looking at superannuation if he was made PM – it didn’t matter what Kaye thought & quite likely she wasn’t even asked for an opinion on the matter. If you can find me anything showing Kaye was previously in favour of keeping the super age the same then yes she would be a hypocrite for calling out Ardern as a flip-flopper.

        What we do know for certain is that Ardern was recently very strongly in favour of raising the super age, now she is not.

        • “What we do know for certain is that Ardern was recently very strongly in favour of raising the super age”

          I don’t think that’s certain. She could simply be good at parroting the current party lines.

        • Blazer

           /  March 7, 2017

          ’Following the success of Pest-Free 2050 and Swimmable 2040, consider nominating a range of further aspirational targets. Universal Jetpacks 2060. Colonise Australia 2070. Eternal Life for All 2080. That sort of thing’…….National….disaster…you call that governing.

        • duperez

           /  March 7, 2017

          I get all that. You’re saying it didn’t matter what Kaye (and all of the others in Caucus I presume including the much vaunted Finance Minister) even thought & quite likely they weren’t even asked for an opinion on the matter.
          I keep hearing about how fantastic the group is and their great capabilities yet you’re suggesting the previous leader considered that what they thought about a vital matter was of no consequence? They weren’t capable of even contributing but are capable of running the place?

          What the hell is that about?

  8. Geoffrey

     /  March 8, 2017

    Perhaps if a proportion equivalent to the old social security tax was extracted from PAYE and invested, as was promised, there would be no problem. It is the foolhardy practice of trying to spend a dollar more than once and then blaming the elderly for living that is the problem.