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Amanda Morrall talks to out-going Retirement Commissioner Diana Crossan about financial literacy, saving, getting old and getting out of debt

Amanda Morrall talks to out-going Retirement Commissioner Diana Crossan about financial literacy, saving, getting old and getting out of debt

By Amanda Morrall

A decade since she was appointed the country's first ever Retirement Commissioner - a job which to this day gets confused with "looking after old people"  - Diana Crossan is turning out the lights.

While she won't be quitting public life, or work for that matter, Crossan's departure, (in January 2013) will invariably leave a void.

In the 10 years she's occupied the portfolio, which has a broad mandate of looking after the financial welfare of 5 to 105 year-olds, Crossan has been instrumental in setting up a national financial literacy strategy, putting money on the map for millions of Kiwis through the Retirement Commission's flagship website Sorted,  getting schools and educators to take a keener interest in teaching personal finance to kids, and raising awareness about the need to save for retirement.

In the interview above, I talked to Diana about her legacy with the recently renamed Commission for Financial Literacy and Retirement Income, and some of the challenges ahead for her successor.

Prior to her leaving the Commission, Crossan will celebrate a few more successes including the launch of a new annual event called Money Week (Sept.2-8) and also a new initiative targeting over 55s.

"Frustratingly", Crossan's efforts to have the Government address identified problems with the sustainability of New Zealand Superannuation (NZS) given the rapidly ageing population, have been ignored.

While Crossan won't mask her disappointment at Prime Minister John Key's dismissal of her proposal to gradually raise the age of eligibility for retirement from 65 to 67 over a 20 year period, Crossan believes her efforts haven't been wasted.

"Naturally anybody in my position would like recommendations to be taken up. Of course that's the not the reality. Politics and other issues get in the way. But the good thing for me is the discussion we've had around the sustainability of NZS has meant that most, or many New Zealanders, will have heard that something will have to give. My real worry was that without that discussion it would have been put on people in a hurry.

"I had a vision that I'd be lying on a beach somewhere and I'd hear a Government say we have to put the age of eligibility up quickly because they didn't do it in 2010 when it was recommended. I don't think any New Zealander will be caught out by that now. So in some ways part of the job is done.''

Between 2010 and 2050, the number of recipients on New Zealand Super is set to balloon from 500,000 to 1.3 million.That's compounded by a fivefold increase in the number of people 85 and over.

 NZS (which currently costs 4% of GDP) is forecast to double in cost as a result.

Despite the forecasts, (Mercer's suggested the situation could dwarf the impact of the global financial crisis on NZ by comparison), Crossan doesn't see it as a "crisis."

"I think we have to be careful about the doom and gloom talk and say this is something we can manage and we should plan for it over time. And I think that gives the 30 and 40 years olds time to see where they are heading."

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Well, I haven't got 19 minutes to check it out - so perhaps Amanda you can let me know whether you asked her about the catastrophic losses in pensioner savings/equity that occurred under her 'watch' -
I searched high and low on her website for a press release explaning the risk associated with these type of investments in the lead up to the GFC.  Having found nothing, I have to ask the question, did she fail to read the warning signs at the time, or chose not to 'rock the boat'.  
Either way, perhaps inexcusable given her mandate, I'd say.  I mean I could see it and plenty of others knew of the prevalence of related party loans and bubble lending practices; the lax oversight by the regulators; persons with 'history' being in charge of many of these entities, and so on and so forth.  These now failed companies preyed on her specific "charges" (take Bluechip, for example) and she was, it seems from my investigation, absolutely out to lunch.
So, save me 19 minutes and tell me - was it discussed? 

Haha, nice one Kate.
I don't think you will get an answer!

I like your work Kate :)

I like your work Kate :)

Kate - get your facts right - the Retirement Commissioner is not the Securities Commission and not responsible for regulating finance companies. Why are you such a hater?  Who hurt you Kate?

Thanks, S-L couldn't have said it better myself.
Barry - I do have a 'thing' about quangos - they're a bit like boats.  You legitimate the outgoing based on them serving some useful purpose (like providing a free meal for the family) but you end up parked outside the fish and chips shop on the way home.
Running these quangos costs NZers
per annum.
And I'll bet you can't even name 10 of them prior to reading the article.  That's a good measure of what a difference they are making in your life.
Got 10 yet?  Here ... I'll help!!!!
Arts Council of New Zealand Toi Aotearoa
Broadcasting Commission
Families Commission
Government Superannuation Fund Authority
Guardians of New Zealand Superannuation
Museum of New Zealand Te Papa Tongarewa
New Zealand Artificial Limb Board
New Zealand Film Commission
New Zealand Historic Places Trust (Pouhere Taonga)
New Zealand Lotteries Commission
New Zealand Symphony Orchestra
New Zealand Teachers Council
Public Trust
Retirement Commissioner
Standards Council
Te Reo Whakapuaki Irirangi (Maori Broadcasting Funding Agency)
Te Taura Whiri I Te Reo Māori (Māori Language Commission)
Testing Laboratory Registration Council
Broadcasting Standards Authority
Children's Commissioner
Commerce Commission
Drug Free Sport New Zealand
Electoral Commission
Electricity Authority
External Reporting Board
Financial Markets Authority
Health and Disability Commissioner
Human Rights Commission
Independent Police Conduct Authority
Law Commission
New Zealand Productivity Commission
Office of Film and Literature Classification
Privacy Commissioner
Takeovers Panel
Transport Accident Investigation Commission 
Agricultural and Marketing Research and Development Trust
Asia New Zealand Foundation
Crown Asset Management Limited
Crown Fibre Holdings Ltd
Dispute Resolution Services Limited
Fish and Game Councils
Health Benefits Limited
Leadership Development Centre Trust
Learning State Limited
Māori Trustee, the
National Pacific Radio Trust
New Zealand Fish and Game Council
New Zealand Game Bird Habitat Trust Board
New Zealand Government Property Corporation
New Zealand Lottery Grants Board
Ngai Tahu Ancillary Claims Trust
Pacific Co-operation Foundation
Pacific Island Business Development Trust
Research and Education Advanced Network New Zealand Limited
Reserves Boards
Road Safety Trust
Sentencing Council
Southern Response Earthquake Services Limited
Te Ariki Trust

BTW - the quangos alone don't cost us all that dough per annum - that's all government (oops .. my 'enthusism' got me) - and that number gives us our $10b per annum shortfall (at the time according to the article linked).

Pleasing to hear comments related to retirement and superannuation which are well-informed, based on sound reasoning, and are non-alarmist.
While some of the comments are open to debate, unfortunately there are too many such as Kate who are too ready to fly-off the handle (without considering the facts as Kate admits) based simply on prejudice.