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Have your say: Should New Zealand raise the retirement age to 67?
Raising New Zealand's retirement age from 65 to 67 could help save the country at least NZ$100 billion by 2061, according to investment services company and Kiwisaver provider Mercer, the NZHerald reported.
Lifting the eligibility age to 67 and removing disincentives to taking up annuity products such as Kiwisaver are two solutions that could potentially address the problem, it says.
In the report, Securing Retirement Incomes - Time to Act, Mercer recommended raising the age of eligibility as one option, with an alternative being linking the NZ Super age of entitlement to the life expectancy of the population. As life expectancy rises, so would the retirement age.
Lifting the age of retirement in New Zealand from 65 to 67 would save the government at least $100 billion by 2061, says Mercer.
However this debate is stalled as long as Prime Minister John Key sticks with his promise to quit Parliament if the retirement age did not remain at 65.
Retirement Commissioner Diana Crossan said yesterday she was disappointed the government was not taking more action to address the looming retirement crisis, leaving private firms such as Mercer to do the work.
"The government needs to be doing the sums," she says. "They have come out and said we are going to be OK, but how do we know? The most important thing the government can do at the moment is get the figures out so we can start looking at possible scenarios."
We simply cannot afford to keep the retirement age at 65 if we want to avoid a massive fiscal crunch and either higher taxes or a privatised health system from 2020 when the baby boomer bulge hits us. Other countries, including Australia, are raising it to 67. Others, including Denmark, are linking the retirement age to life expectancy changes.
I'm surprised John Key has painted himself into such a corner. He had better get the solvent out.
We simply have to have the debate and his promise acts as a wet blanket on the debate.
We welcome your comments and insight in the comment space below.