The Retirement Commissioner maintains we would need 15 to 20 years of preparation time, if the age of eligibility for national superannuation was to be raised.
Diane Maxwell says 65 is not what it used to be, as we’re healthier and living longer.
Yet a move towards raising the age of eligibility would need to be planned and signalled - something Prime Minister John Key has completely refused to do.
Maxwell says there would need to be a long lead time before any change is made, as both employers and employees would need to get ready for the shift.
Some key decisions would also need to be made around how the Government’s savings would be spent.
“If we had an eligibility age of 67 today, we’d save $1.5 billion a year, out of the $12.2 billion that super costs,” Maxwell says.
“The question is, what do you do with that $1.5 billion, where should it go? For example, should it be invested in people between the ages of 45 and 55 who may need retraining; who may want upskilling to be able to work longer; who want to be prepared for a job of the future?”
Maxwell says consideration would also need to be given to how much of the savings from paying less super would be spent funding unemployment benefits for those unable to get jobs.
This is a key consideration, as New Zealanders are increasingly both needing and wanting to work beyond 65, but are often brick-walled by ageist employers.
“Don’t even send me a CV”
A Commission for Financial Capability (CFFC) survey of 3000 people concludes New Zealanders see the age of retirement as being between 68 and 72.
“They [respondents] wanted to work partly for the money but also for the purpose - to be active, keep their brain active, social connectedness, all those things.”
Yet Maxwell says: “We hear from recruiters that they try to put forward a CV of someone who is 55, 60, 65, and they get told, ‘Don’t even send me the CV. We won’t do an interview’.
“So I think employers have a fair bit of work to do and I think things need to change in the workplace.”
Over 80% of the 5000 companies the CFFC has recently surveyed say they don’t have plans in place for their workers over the age of 50.
“But I think we’ve also got to ask ourselves, ‘What do we think is old?’” says Maxwell.
“If you think about it, Clinton’s 69 and Trump is 70, and one of them (hopefully Clinton), is going to be the leader of the biggest economy in the world. So we don’t mind a 69-year-old US President, but we don’t want a 69-year-old to hand us our boarding pass as we board our flight.”
The benefits of employees who doesn’t stand on swivel chairs to change lightbulbs
Asked whether small to medium sized businesses (SMEs) may find it harder than large corporates to accommodate for older workers - by giving them extra training around technology or more flexible working hours for example - Maxwell says:
“Inherent in that question is a belief that somehow, someone 50-plus will be less productive, more of a problem. I’m not sure that we know that.
“Why would a 55-year-old not be as productive a worker as a 35-year-old for a SME? They may bring in a level of maturity, steadiness, consistency, experience, and that may be extremely beneficial to that SME, particularly if they’ve been in that industry for a long time. They may have a lot of historical knowledge that’s incredibly useful.”
Furthermore, a large employer has told Maxwell that at 60, workplace accidents halve, “because 60-year-olds don’t stand on swivel chairs to change lightbulbs”.
The biggest change will come when businesses understand the value of it
The Retirement Commissioner maintains both government policy and a cultural shift within the business community are needed to make the most of our ageing workforce.
“As with any diversity measure, businesses need to understand how it’s good for business. So there are some things that you can legislate for, but actually, probably the biggest change will come - as it has women and other forms of diversity - when businesses understand the value of it.”
As for government policy, she says CFFC survey results show people want to see changes, but a lot of thought would have to be put into this to avoid any unintended consequences resulting.
Taking age out of the equation
Maxwell says older workers also need to do their bit by changing their attitudes towards work.
She acknowledges it’s tough: “I get lots of letters and emails from people, and they’re getting knocked back, and knocked back, and knocked back. They’re feeling discriminated against, they’re losing their confidence, they’re losing their mojo. Interviews are hard enough, without being turned down for the last 50.”
Yet Maxwell suggests older job hunters try to take their age out of the equation.
Rather, they should ask themselves, ‘What am I offering? What are my skills? Am I offering to be retrained? Am I sounding optimistic and open?’
She suggests they get second opinions on their CVs - even from younger people - and give themselves a “good hard talking to” about how good they are with technology.
What’s more, Maxwell highlights a point independent economist, Shamubeel Eaqub, made in a presentation at a CFFC forum on the ageing workforce last week, that New Zealand’s moving from a primary and goods producer to a services sector nation.
In other words, there’s less demand for manual, labour intensive work, which older employees may struggle with, or that might cause people to age quicker physically, and more for office jobs.
See this story for more on what was discussed at the CFFC’s ageing workforce forum.