By Peter Cordtz*
“Duty of care” is term bandied about in various settings, most often in reference to our obligations as employers or providers of service. The standard definition offered is “a moral or legal obligation to ensure the safety or well-being of others”.
Having said that, the first experience we all have of this duty is the one that goes largely unrecognised and unrewarded. This is, the care we’re provided by our primary caregiver through our most vulnerable years.
I say unrewarded but as a father of four, I understand the real rewards of that labour of love. I say unrecognised, but I will be eternally grateful to my wife for committing two decades of her working life to being there for them when it really counted (and when I couldn’t be).
Now we’re 54, relatively financially secure and our children grown, you might say we ‘survived’ that decision. However, the reality is my wife has paid more for that than me. Without wanting to jinx our 30th wedding anniversary next year, if for any reason things don’t work out for us (sorry dear, I’m just trying to make a point), she starts again from a very different place than me.
Notwithstanding the gender pay gap of 9.2% and the impact of a 20-year gap in your career progression, she also missed the opportunity to save or invest through that time. That includes little or no contribution to her KiwiSaver account for the decade 2007-2017.
I know our collective assets are part of the matrimonial property that would be considered if we split (including KiwiSaver), but it still represents a loss. In fact, even if our twilight years go swimmingly well together, it represents a loss for both of us.
We know women arrive at retirement 18% financially worse off than men, on average. To make the road harder, they also live longer. It’s not surprising then that research commissioned by CFFC noted there are more than twice as many women as men living in poverty beyond 65 - 14% compared to 6.6%.
That research paper, prepared by Jennifer Curtin and Yanshu Huang of University of Auckland’s Public Policy Institute, suggested one way to address this would be to pay a ‘care credit’ into women’s KiwiSaver accounts to recognise the time they take out of paid work to look after family.
They cite examples of other countries’ efforts to redress this disadvantage, including Estonia which pays employer contributions for up to three years per child, Norway that credits individuals for periods of care work with approximately 71% of the average full-time wage, and Finland, where women’s pensions are topped up with contributions of up to three years per child.
This and other insights from the research commissioned to inform the 2019 Review of Retirement Income Policies will be important in shaping our recommendations in the report due to be tabled in Parliament in December for the government’s consideration.
The scope of this year’s Review includes the perennial issue of the fiscal sustainability of NZ Super, but we have also been tasked with considering the effectiveness of policies in addressing financial vulnerability and equity. That’s why we’re looking closely at the issues that hold women back from entering retirement as financially secure as men, and what New Zealand could do to help right this imbalance.
This and the other areas of interest can be found in the full terms of reference for the 2019 Review at www.cffc.org.nz, along with relevant research and a platform for New Zealanders to provide feedback. Public submissions close on October 31.
*Peter Cordtz is New Zealand's Interim Retirement Commissioner.