Saving New Zealand promotion timely

Saving New Zealand promotion timely

The Employers & Manufacturers Association (Northern) is backing the Saving New Zealand project launched today by the Investment Savings and Insurance Association. The project's objective is to build the acceptance of saving as something everybody does, and benefits from.

"New Zealand Super will ultimately exist only for people unable to save for themselves and those happy to live in retirement at subsistence levels," said Alasdair Thompson, EMA's chief executive.

"So this project setting out the options for saving is timely, even more so with New Zealand's Retirement Savings policy currently under review.

"Means testing New Zealanders eligibility for superannuation is the key to making sure people provide for their own retirement.

"People won't start saving while they think their retirement income will be covered by general taxation on a pay-as-you-go (PAYG) basis.

"Universal PAYG schemes like the present NZ Super scheme are unreliable as fertility rates decline and people live longer.

"The unfunded pension liability of France now exceeds 200 per cent of GDP; Italians pay a third of their tax on salaries and wages to fund their pensioners. New Zealand is headed the same way.

"Government should announce a transition phase during which NZ national Super is converted into a means tested PAYG pension to top up private super schemes.

"The message to New Zealanders should consistently be: if you want a retirement income higher than that provided by means tested NZ Super, you will need to save."

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