If outgoing Retirement Commissioner Jane Wrightson could change something in an instant, she says she would put an end to the tinkering with KiwiSaver.
Speaking to interest.co.nz, Wrightson says the retirement income system is a system.
“The worst thing we can do is look at NZ Super all by itself and KiwiSaver all by itself, and private savings incentives all by themselves,” she says. “It’s all part of a system that says ‘what do we need to do to provision people for their later years?’”
People have to look at all of those things together and take a systematic approach. Otherwise you’re just tinkering, she says.
“I’ve been a bit voluble about tinkering in the last couple of months as I’m going out the door because that’s what I see as being our longer term problem. We tinker with settings and we don’t look at them holistically and therefore, we’re not serving New Zealanders and taxpayers well enough, in my view.”
'More egregious than most'
With the Government recently announcing plans to allow KiwiSaver withdrawals for farms, Wrightson says this is an excellent example of tinkering.
“That one’s more egregious than most because it came clearly out of direct political lobbying. I have no insight as to why the Government made the decision it did … A farm is a business - you may as well invest in a dairy as well as farm."
She says it goes completely against the spirit and purpose of KiwiSaver.
While there’s no particular lever she would tweak when it comes to the retirement system because she sees it as all interconnected, what Wrightson really wants is for there to be a grown up conversation around what the next 30 years of a retirement income system looks like.
Wrightson says that needs to be looked at with "evidence and with independence, and with a genuine commitment, from at the very least, the major parties, to say ‘yes we will do this’".
When asked about the call for cross-party action, Wrightson says “that’s one of my regrets - that I didn’t get onto this sooner”.
For her first term, Wrightson was focused on getting the Retirement Commission strategically focused, working well with industry peers and getting a presence back in Wellington. Her second term was about “the crunchier things”, she says, "which is how do we get a system that lasts another 20 or 30 years that doesn't lurch".
“I would have gone way more into multi-party engagements than I’ve managed to do. And I think that’s an amazing opportunity for the new Commissioner.”
“The parties themselves have very different views on such matters. I think that the richer conversations are behind the scenes, not on the stages,” she says.
“If you poke any politician, they’ll generally say ‘we want what’s best for the country’ and working out what's best for the country looks like, is a really, really good problem to solve.”
Can't imagine the pension going
Wrightson says she can’t imagine a Government getting rid of the pension but she can see that settings could change in the future.
“I say to that, all right, which settings? Don’t just say ‘put the age up’ and the job’s done, because it’s not.”
“What about means testing for a period? What about connected KiwiSaver incentives? Will you dare ever look at tax? I bet you won’t but there’s all these mechanisms that should be looked at.”
As for the wins, there’s supporting the Retirement Villages legislative review, helping make financial education be taught in schools, increasing default KiwiSaver employer and employee contributions from 3% to 4%, and extending contributions to people aged 16 and 17.
“Small commissions like this one can be quite good at problem solving … We’re not big policy shops, we’re not big bureaucracies … but we’re very nimble at seeing opportunities within our statutory mandate.”
David Boyle new commissioner
David Boyle, the general manager at Fisher Funds, has recently been appointed as the next Retirement Commissioner.
Boyle, who will start on May 18, has previously worked at the Retirement Commission, and Wrightson says the Commission will be in good hands.
Although she’s leaving the Retirement Commission, Wrightson isn’t retiring just yet.
“I’m just retiring from full-time work. I’ll undertake governance roles … I’ve had board roles now for many years and that’s what I’ll concentrate my time on.”
As for her parting words, Wrightson says she is thankful to the sector and their help. “There’s been a generosity of sharing information that I’ve been humbled by.”
“I think if I’ve done anything, I’ve tried to put retirement and the wider issues back on the agenda,” Wrightson says.
“It’s not just about financial capability. It’s not just about KiwiSaver. It’s about a bigger thing.”
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