A better plan to attack the retirement age problem

Jamie Mackay writes

I want to talk about retirement, a word that doesn’t always sit comfortably with rural folk. In the case of farmers it can sometimes even have deadly consequences. I know too many farmers who have either retired early to town, only to die on their La-Z-Boy recliner, or those who have never retired from the farm at all and died with their boots on!

Which leads me to the big political debate of the past week – the age of eligibility for national superannuation. I reckon the solution to the super debate is simple. Lock Bill, Andrew, James and Metiria, Te Ururoa and Marama, David and Peter in a confined space and let them out when they’re reached a bi-partisan agreement on national super. Note that I haven’t included Winston in the aforementioned group of political party leaders, due to his propensity and penchant for peeing into the tent from the outside.

Although it’s admirable Bill is tackling this thorny (some would say no-win) issue in election year, I question the reasoning for the arbitrary peg in the sand in 2037. That can end up being tinkered with by successive governments over the next two decades.

Surely the answer lies in a graduated introduction sooner, over a longer time frame, meaning those who have to face the full noise of the national super at 67 get a long period of notice to prepare.

My theory is that from April 1, 2020, the age of eligibility for national superannuation is lifted by one month per calendar year. Under that scenario by April 1, 2044 (after 24 annual incremental increases of one month) the age of eligibility would be 67 years. For someone of my 57 years that would mean that I’d qualify for national super at the age of 65 years and four months but I’d have eight years warning to figure out to fund the four month deficit. Similarly, someone aged 40 has 27 years to plan for a pension at the age of 67 in 2044.

So what about the critics who quite rightly claim such a scheme would disadvantage manual workers whose bodies wear out more quickly, or Maori/Pacifika whose life expectancy is less than that of Caucasians? Once again the answer is simple. You choose to take national super at a younger age but the trade-off is you accept payment at a lesser rate commensurate with the total value of the benefit over its expected lifetime.

As explained a number of times, National and Bill had no idea they were going to change the retirement age a month ago. ?And as such, it is very much designed to become a do-nothing policy. ?Certainly something that will be bastardised by successive governments in the mean time.

In the end, whoever is old at the time will still be voting. ?As a result, no government of the day is going to leave that huge voter bloc hanging with no money to pay the bills.

As for the proposed phasing in and payout for people who want to retire earlier, that’s the sort of debate we should have had. ?It certainly looks like a more sensible starting point than announcing a one-off adjustment 30 years from now.


– Kamie Mackay,?The Country