New Zealand's retirement system - made up of mostly of KiwiSaver and NZ Super - scores poorly by international standards in terms of the income people receive in retirement, slipping from 25th to 28th place out of 48 countries around the world -- a C+ by that measure.

The ranking, released yesterday by Mercer NZ, a financial services provider specialising in retirement and superannuation, looked at schemes' adequacy, sustainability and integrity. It ranked New Zealand a B overall, with a ranking of 14th mainly because NZ Super is universal for those aged over 65.

The Netherlands took the top spot, ahead of Iceland and Denmark. The Netherlands has a similar universal pension to NZ Super and other savings and investment schemes alongside it that are generally industry-based, but Mercer says they have much higher combined contribution rates sitting at 12 percent.

The Women’s Rights Party says women, due to low pay in typically female jobs, low income over their lifetime, part-time employment and career breaks to raise children, are struggling financially as they age.

Co-leader Jill Ovens says women are also often disadvantaged following relationship breakdowns.

“Selling the family home and having to split the asset can see women with insufficient funds to buy into another property, and because they don’t earn as much on average as men, they may not have enough income to secure a loan,” Ms Ovens says.

“This means more and more older women are ending up in rental accommodation, where sky high rents and lack of housing for the elderly, are a real issue, especially as we tend to live longer.”

A major source of the disadvantage women face in retirement is inequity in retirement savings, the Women’s Rights Party says. In New Zealand, the average KiwiSaver balance for women is 25% lower than the average balance for men across all age groups.

“The drivers of KiwiSaver inequity are well understood, and it is clear that more can be done by the Government to improve equity in retirement incomes for women,” Ms Ovens says.

The Women’s Rights Party proposes the following:

• Require an employer to treat all its employees the same when it comes to the employer KiwiSaver contribution. For example, Health NZ | Te Whatu Ora contributes the minimum statutory 3% KiwiSaver employer contribution to its women-dominated workforces – nurses, midwives, clerical workers, cleaners and food services workers. But the historically male-dominated doctors and dentists are paid a 6% employer contribution on much higher salaries.
• Address pay equity. The “pay gap penalty” on KiwiSaver contributions is equivalent to an additional three or more years of retirement income; a meaningful difference in spending potential as women tend to live longer than men.
• Continue employer contributions to KiwiSaver during maternity leave, noting that as of July this year, Inland Revenue will contribute 3% as an employer contribution to those who decide to have KiwiSaver deductions from their paid parental leave payments.
• Address the so-called “motherhood penalty” with a contribution by the State to carers’ KiwiSaver funds, that recognises the social value of childcare provided by those who are not in paid employment (usually mothers) and by those who are the primary carers for dependants and other family members who need a high degree of support (also often women).
• Lift KiwiSaver employer and/or government contribution rates (the statutory minimum employer contribution is currently 3%, but in the original scheme the employer contribution was supposed to go to 4%)

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