Diane Maxwell on employing people who don't stand on swivel chairs to change lightbulbs, the age of eligibility for super and overcoming the hurdles older people face in the workforce

Diane Maxwell on employing people who don't stand on swivel chairs to change lightbulbs, the age of eligibility for super and overcoming the hurdles older people face in the workforce

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.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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No major party is advocating anything like a rise in retirement age, so it's laughable to propose what to do with the "savings".

Maybe. But someone responsible who understands the issues deeply needs to say this stuff. And keep saying it. Political party positions are not locked in stone forever. They change in response to factual pressure (or in the absence of that, self-interested bias - ie rentier pressure). 

So factual pressure needs to be out there.

Message from Winston to those that resent Super, & NZs stable democracy that looks after the elderly to a minimum level:

"There is a sustained attack on the SuperGold Card and Superannuation affordability.

Many argue about increasing superannuation numbers as if such an argument would hold up for increased primary school or tertiary education numbers. If it’s poppycock to apply such an argument to primary school entrants and university entrants why would it have validity on NZ Super.

That tells you the real story: they do not like NZ Super in spite of the fact it is affordable and will be affordable well into the future.

We say hands off the SuperGold Card and NZ Super."

I assume that she is also proposing that the Kiwisaver payouts be delayed as well!

Good point. I'm not in it. Yet. So haven't researched the contract you enter when signing up. I assume that the contract would need to be renegotiated of they were to change the age at which you could access your kiwis er fund? Otherwise they would only be able to change it for new entries to the scheme.

I'm pretty confident that the rules state that you can access your KiwiSaver freely when you reach the age of eligibility for NZS, so if one changes the other one does too.

Nothing, however, states that you have to do all, or any, of your retirement savings though KiwiSaver. Put some or all of your savings into a non-KS savings fund and you can access it whenever you like. Your bank will be more than happy to help.

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is she not the same retirement commissoner that said people should buy a house, now she wants to extend the age of retirement, is that to give people more time to pay it off.

Bingo.

National Superanuation along with other benefits are killing NZ.
On top of my Father in Laws super he also gets,
Medical alarm $16.00 per week
medical fees $15.00 per month
gardening $35.00 per fortnight
telephone $49.75 per month
prescriptions $69.90 yearly.
On top of that a rates rebate is also available.
They may have paid taxes but they didn't pay enough.

This is not about how much tax people paid, but what the Government has done with that money. Have you looked at the politicians pay and conditions? Remember what Piggy Muldoon did with that embarrassingly large Super Fund?

Why should teh Government be interested in saving $1.5 Billion, and what would they do with it? Of course - it's blatantly obvious - put it into accommodation supplements for all the elderly who've been made homeless or can no longer afford their homes because the Government's economic policies have screwed them, and they (the Government) are too interested in subsidising their rich landlord mates (which includes themselves naturally)!

Actually i'm almost 60 and am worried on two counts, I'm sick of the politics and egos that are evident in the work place and those who play that game the most not being held accountable for it, and i'm worried that despite the preparations I made when i was in my twenties, if I can afford to retire?

This lady is obsessed with raising retirement age for super. Why not suggest some other solutions like only giving super to people who've worked and paid taxes in NZ for over 10 years, or limiting super to people that need it (as many don't).

Or, heaven forbid, make NZ less hostile to young people with lower house prices, so talent is more likely to be attracted, real growth is higher, family formation is easier etc...You're a broken record Diane Maxwell.

Diane Maxwell is the "Retirement Commissioner", so it's only appropriate she talks about issues such as the age of eligibility for super and our ageing workforce. She can't possibly be made responsible for plugging Auckland's housing supply shortage!

her only solution is raising the retirement age...there are many other ways to fund pensions without slaving our old people

Other countries are looking at raising the retirement age as a possible solution to ease the financial burden. Back in 2013 the International Business Times reported the UK announced it was raising retirement age to 68 with effect from mid 2030's and then again to 69 from late 2040's. OECD reports Italy and Denmark are considering raising pension age to 69 from 2050. We have to look at all the possibilites.

agree Craig, look at all possibilites...Diane Maxwell only ever talks about the one and only possibilty...it's myopic and not really helpful from a top public official

How much of the taxes the earners today are paying is padded for taking care of the super that has to be paid ?
This is a generational issue. If some one has been paying higher taxes/levies in the anticipation of getting back some by way of super at a certain age, how can that social contract be broken unilaterally, without making some adjustment in what is paid in ?

this goes all the way back to muldoon, him and his national Governement got rid of forward funding and decided it was best to fund super on a pay as you go system, they still have that mindset hence the stopping of contributions to the super fund and trying to fill the place with young immigrants to balance the population

So, we are not going to be the Switzerland of the Pacific soon ?

For years now the major justification for our ridiculously high rate of immigration is to bolster the number of working young people necessary to support that demographic bulge of fogies. So why in the hell are we allowing immigrants to then import their own fogies and add them to the bulge, leaving us at square one? And what about the deep flaws in the assumption that if we import working-age people, that there will be jobs for them in a service economy with a diminishing need for human labour? Is a bit of joined-up thinking between the various contradictory policies too much to ask?

We have no real need for new immigrants. NZ has got lazy. An easy target for those who wish for a better life.
It has happened before to other countries. US,UK etc.
An endless cycle.

Wait wait wait...
She's not saying that money needs to be saved, and super is where it should be saved. So why have this conversation at all?

I thought the government was running a surplus and we could be looking at tax cuts next year, not to mention all the money that TPP will bring to the economy right. Maybe we could reduce politicians pension and their wages to make up the difference?

I'd rather forgo a tax cut to see people be able to retire at 65 because I know I'll bloody want to by then.

We already have a 10 year living in NZ qualification for super...I hope there aren't a ton of loop holes in that. Sure that could be tweaked. But common, someone who's been working their whole life deserves to be able to retire at 65 if they want.

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im sorry 10 years is pretty short unless you are the top 1% of earners paying a heap of tax.
maybe should be some means testing as to what you have paid in against what you get back.
why should a born and bred kiwi pay all his working life and receive the same payment as someone that only paid ten years (if they both pay the same amount of tax)

Then that is a change to the qualification criteria, not to the raising of the retirement age.

Looking at the already deeply-troubled energy sector:

http://crudeoilpeak.info/peak-oil-in-asia-part-1

the ever-worsening global environment:

http://www.rawstory.com/2016/06/unprecedented-scientists-declare-global-...

and the global financial system propped up by historically low interest rates

http://www.businessinsider.com.au/chart-5000-years-of-interest-rates-his...

does anyone seriously think present economic arrangements will continue for another 15 or 20 years?

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Diane Maxwell says 65 is not what it used to be, as we’re healthier and living longer. ... How old is she and how does she know this? 65 is not the new 45 despite what some people may wish. I'm 69 in a few months and very grateful for my superannuation. I worked from home after retiring from full time work at 60 on a casual contract basis up until a few months ago when I found my concentration and my body wasn't doing the job as it should be. Despite what the advertising industry portray retirees as silver foxes hail and hearty with glamorous blond/grey wives that is not the reality. Early onset Alzheimer's and chronic illness hit many people before 70. I deal with chronic arthritic pain on a daily basis as many of my friends do. We try our hardest to look good, exercise regularly and pretend that we are okay and get on with daily life. All superannuation is gratefully received and in our case tops up the savings set aside during our working lives to have a comfortable life without burdening our families.

great comment gin. My ideal retirement commissoner would be one who comes up with ideas for people to retire sooner rather than later. Both my parents died before aged 67, I don't.want to work my whole life or when I am sick

You can retire whenever you like, you just can't expect other people to pay for it before the age of eligibility.

There is masses and masses of evidence that people on average are living longer and more healthy than ever before, and that that trend is expected to continue. Of course that average hides variations, some people are not as fortunate as others in their health and there are targeted policies in place to help them. But you cannot really be suggesting that everybody should be treated as well - ie, as expensively - as the most unfortunate.

Without in any way denying anyone's quality of life or health issues, the simple fact is when the universal Super benefit was introduced in 1977, average expectency for males then was an additional +13 years, +17 years for females.

The latest data has those numbers as +19 years extra for males (ie to age 84) and +21 years for females (age 86).

Over the 37 years from 1977 to 2014 this additional life expectancy has inflated the real, demographically adjusted costs by a third (the dollar costs by much, much more). And no one is suggesting the trend has finished. It seems entirely reasonable for society to want to cap that in some way. Raising the retirement age is one effective way to do that. There was nothing magic about age 65 in the first place. On the same basis as 1977, today's level should be age 70. In the future it could be higher. While there is still nothing magic about these ages, there is no hiding from the costs these demographic shifts impose. And they are imposing them on a smaller pre-retirement population. No matter you view now, something will have to be done at some point. Selfishly putting it off for your own personal advantage is hardly a good reason to delay.

Arguments about fairness need to be balanced, and not always in favour of the beneficiaries at the expense of the payers.

Apart from the politics of it, nothing says 65 was the correct level then, and certainly not now. Life expectancies change. And so should the "age of retirement".

David I understand your logic and the argument for a higher age. Still some other countries have lower retirement ages than NZ, and aren't putting it up. How do they do it? Where are those ideas from the retirement commissioner? Nowhere. It's always the same thing from her, lift the age of eligibility.

Retirement ages internationally:
https://en.wikipedia.org/wiki/Retirement_age

Totally understand your rationale David and to some extent agree. However just because life expectancy is longer doesn't mean to say the quality of life is better. Living in the provinces where the aging demographic is prevalent it's my observation that the quality of life isn't that great. I see it every week at the golf club! Everyone hobbling around on crook knees and hips, and have to say that the prevalence of melanoma especially in the men is quite high. I actually remember when the eligible age for super was 60 and my mother cldnt wait to receive it, she died at 59. That was in 1978. 60 was too young and maybe 65 is now too, however what is the right age for eligibility and who will set it? I think maybe means testing as in Australia is probably a better idea. I have a few friends who are very wealthy and I see no reason for them to be receiving government superannuation. Cruising the world every year and buying investment properties out of their savings of national super hardly seems fair to me.

Japan hires senior workers in convenience stores; security guards; and as parking attendants.

15 to 20 years needed so that they can avoid pissing off the boomers and screw over Gen X yet again.

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Gen X may themselves quite like the idea of retiring at 65. Don't assume that they are all for a later retirement age. Once you put it up, it would be nigh on impossible to bring it back down again.
Another factor is obesity. I doubt that people will continue living longer. My view is that very soon, people will start dying earlier.

That's my point. This is an established pattern - shovel the goodies at the boomers who have the numbers to be worth bribing for votes, then when they're safely through, change the rules to screw over Gen X, who don't. Uni fees and interest-bearing student loans all over again. When the retirement age is put up to 70 or whatever, it'll be carefully timed to fall on Gen X and the unlucky tail-end boomers.

NZ is the envy of the world with an uncomplicated universal Super, non-means tested, and a country where the elderly are (mostly) not living in poverty. This itself is a huge social and economic benefit to all of the NZ society. There is no incentive for the elderly to hide their wealth just before retirement, or for the Govt to spend money on means testing.

NZ Super is not seen by most NZers as a social welfare 'benefit' such as the unemployment, DPB, Sickness, etc as most kiwis are happy that the over 65s get a basic universal income.

That's all true; and raising the age of eligibility would change none of it.

Quite right kakapo. "Let's raise the retirement age but wait until the boomers have go all their self provider freebees first." Unbelievable. By my maths this will be just in time for the first generation of kiwis who had student loans to have gotten to retirement age. Means test super now.

Any idea will do. So you have or have had a rental/ investment property for more than 10 years? I would make it that you are not eligible for super at all. Great way to dis incentivise long term property hoarding and increase supply. Also apply a massive 90% CGT to crush speculation.
My main point is the age of eligibility need not be the issue IF we address the warped tax system we have that promotes property hoarding & speculation instead of encouraging real business and innovation which employs people and adds to production. The right approach and some thinking outside the box can solve this.

When they are talking about Universal Living Wage or something like that, how can this idea be tolerated ?

long term entitlements shouldn't be a problem. As the greater depression deepens and resource constraints like diminishing oil reserves start manifesting then life expediencies should fall off.

Hang on, National has already said NZ can afford to keep the age at 65, so why would it need changing. They also say that there isn't a house price crisis in Auckland. The fact is we can afford to keep it at 65, but we have to get our productivity up. Essentially the Super is just a living wage which everyone gets, which is great, and is what you paid you taxes in for. it doesn't discriminate over whether you have bothered to save for your retirement or not. Those that have get the benefit of topping up the super with their savings for a better life. What is wrong with that. Asset or income testing is only going to cause a lot of resentment, and is not needed, because as National have said, we can afford to keep it as it is.

We can afford super in its current form.... For At least another year to get through to the next electoral term. Sick of politicia s sticking their heads in the sand, ignoring big issues and making it the next government's problem.

Maxwell says:“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.” We don't mind...? The leader of the economy...? Hopefully Clinton...? She sounds more like a United-Statian-Brown-Nosing (USBN) campaigner than a minister for New Zealand. Has she no shame? Obviously, about as much as education!

“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.

Something that has never been mentioned or even considered...
Permanent disability through accident on ACC.. this stops at 65 and the super takes over.
What is the cost to ACC to extend out?
These people also have no kiwi saver employer contributions....and having been on only a proportion of their income , even IF they have kiwi saver this is also reduced... in many cases making kiwi saver unaffordable anyway.

Lifting the retirement age by a month a year provides certainty and not too much adjustment as a jump to 67/68 or whatever would be and the lift could be increased/decreased/eliminated as events dictate in future. Quite simple, easy to understand, lower reduction in costs but still worthwhile balancing fiscal & personal considerations.

Just in time for the last boomer to retire, than lift the ladder once again as haha suck it young people

Without pensions what do people resort to? Huge numbers of children to ensure there are one or two able to take care of you in their dotage? Suttee?
Do everything you can to make sure future governments will keep things in place for the continuation of a universal pension of some sort.

65 is old for a big percentage of the population. For every Clinton or Trump look alike there are plenty worn out and hardly capable of a few extra hours to supplement meagre pensions. We have technology coming which will do a whole lot of the service work this ghoulish retirement commissioner seems to be reserving for Grandmothers anyhow. I'm with Key all the way on this one.

Raising the age is a pretty blunt instrument. Comprehensive means testing is hard, although WINZ seem to manage it OK for oldies going into care.

Here's a thought that should annoy both sides of the pension argument

Start paying the pension at age x (currently 65)
Treat it like a benefit up to age y - ie roll it off against income over a certain limit
The limit would be $z/week

This amounts to income (not means) testing - for a while. Affects those who put in a tax return.

I could see x being 60 because if you are out of work at 60 with no particular skills your chances of finding work are pretty slim. y might be 70 - after that age the pension would be paid using the current rules. z is about $80/week for present beneficiaries - for us specially deserving oldie types we might make it $150 ... WINZ already manage this sort of stuff for beneficiaries. Someone with more info than me could probably model this and estimate what it would do to costs.

I know that it totally bananas for me and my wife to be getting a pension.

It probably doesn't mean much, but the number of registered job-seekers (130,000 give or take a bit) is pretty close to something I saw the other day about the number of over-65s still in work (140,000). I know this doesn't account for differences in the people etc etc but it was a coincidence that I found interesting.

Make