The following summarises the key messages from each section of this report.

Each section concludes with a series of ‘Questions that New Zealand needs to discuss’. There are 133 in all.


This report is entirely the work of the authors in their personal capacities and has nothing to do with their present or former employers.  Although this report draws on work done by the Retirement Policy and Research Centre at the University of Auckland, the RPRC has made no direct contribution to the report.

The authors have given their time pro bono publico.  No-one has asked them to produce the report and no-one has paid them for their time.



Here you will find an introduction to the review including our initial comments on the government’s Terms of Reference for the 2019 Review.”

Section 1

Our vision

Our Vision - Reforms that really matter: So as to put this report in context, we list the nine key issues or reforms that we see as essential to a sustainable, flexible, inclusive retirement income framework. We list them in order of significance to us, starting with greater economic growth.

Section 2

Economic Growth

Economic Growth: Growing the economy is the first priority in preparing for an ageing population. A bigger pie means there is more to share amongst everyone, including the old. If we want a ‘better’ retirement, improving productivity is also important, particularly as the proportion of ‘workers’ shrinks.

Section 3

Economic Claims

Economic claims: Public pensions and private retirement savings are both claims against the economy to support the old. Neither is more ‘secure’ than the other as both depend on the strength of the contemporary economy. Countries cannot ‘save for retirement’. Individuals save for retirement by building up claims on future economic activity.

Section 4

Future Cost of NZS

Future cost of NZS: The Treasury makes regular estimates of the future cost of New Zealand Superannuation. However, tomorrow’s taxpayers will decide how much to spend on pensions and any decisions that today’s voters make won’t make any difference to that.

Section 5

NZS Unsustainable?

NZS unsustainable?  NZS is ‘sustainable’.  In 2060, its expected cost will be less than the OECD countries’ average cost of pensions in 2011.  As ever, it will be for taxpayers of the day (not today) to resolve their own spending priorities. 

Section 6

Review NZS Today

Review NZS today: We have never had a research-led national discussion on any of the 13 design components of NZS. We should start that today. We spend a net $12.3 billion on NZS today and should wonder whether it can be improved. We have the best Tier 1 scheme in the world, but it can be made better.

Section 7

Wind-Up NZ Super

Wind-up the New Zealand Superannuation Fund: The NZSF does not change the cost of NZS by one dollar. Every dollar in the NZSF is effectively borrowed so the government’s risk profile is higher in its presence. Those are not the only problems. The NZSF should be wound up and the proceeds used to repay debt or build infrastructure to increase economic growth.

Section 8

Overseas Pensions and section 70

Overseas pensions and section 70: Most, but not all, overseas state pensions should be deducted from NZS payments. The detail of how this works today is a mess and needs urgent review.

Section 9

Tax Subsidies for saving

Tax subsidies for saving: Tax breaks for retirement saving are expensive, complex, inequitable, distortionary and regressive. But, worst of all, they seem not to work (raise saving levels). They could even reduce saving levels.

Section 10

Compulsory Private Saving

Compulsory private saving: Compulsory private provision for retirement (Australia, Chile etc.) is expensive, complex, inequitable, inflexible and distortionary. Compulsion may not raise saving levels, but it does require an increasingly intricate relationship with the state pension (means-tests).

Section 11

Government’s roles

Government’s roles: The government should concentrate on doing things that only governments can do. There are five such roles: limiting or preventing poverty in old age; regulating disclosure and reporting; levelling the tax playing fields; obtaining and publishing high quality data and using those for information and education programmes. Everything else should be left to individuals, their employers and the private sector.

Section 12

Home ownership

Home ownership: We do not know whether home ownership levels are falling as the Census questions (since 1996) have been porous. Until we have accurate data, we do not know if there is an issue to be concerned about. Having a paid-off home by retirement age is an important objective for many savers but there are countries (e.g. Germany) where this is less of an issue.

Section 13

The Role of Employers

The role of employers: We do not know what role employers currently play in helping their employees plan for retirement. KiwiSaver has probably helped supplant occupational superannuation schemes but it would be nice to know. The potential shift to ‘total remuneration’ policies matters for the design and implementation of public policy on retirement saving generally.

Section 14


KiwiSaver: Taxpayers have spent $10.1 billion so far on KiwiSaver but we do not know whether it is ‘working’ (raising saving levels).  There seems to be no policy reason to prevent access to savings before age 65; nor to regulate contribution levels nor to limit contribution holidays.  KiwiSaver should probably stay but should be reformed by making it more, not less, flexible.

Section 15

Households' Financial Position

Households’ financial position: Before KiwiSaver, New Zealanders were probably saving ‘enough’ for retirement. Also, they probably did not have ‘too much’ invested in housing; nor too much debt. New Zealand must have a proper longitudinal survey of households’ finances otherwise we do not know what is really happening; nor whether anything needs ‘fixing’. That survey is the government’s responsibility. It is the only organisation that can make it happen.

Section 16

Labour Force Data

Labour force data: We do not know enough about labour force participation amongst older workers; about how we progress from fulltime work to ‘fulltime’ retirement, nor what the implications of raising the state pension age might be. Again, finding these out is the government’s responsibility.

Section 17

Income Tax and Saving

Income tax and saving: The tax treatment of ‘income’ currently favours some investments over others. Definitions of ‘income’ also matter for income-tested state benefits like Working for Families. These both need fixing. We suggest a ‘first principles’ approach to reform.

Section 18

Disclosure Requirements

Disclosure requirements: The regulatory disclosure requirements for ‘collective investment vehicles’ (like KiwiSaver and other superannuation) have changed a lot recently. Some of the changes are positive; others negative. Overall, we rate the new environment as ‘could do better if tried’. Savers are still not central to regulatory objectives and there needs to be research as to whether the new disclosure regime is improving the understanding and decision-making of investors.

Section 19

Regulation - Standards of Conduct

Regulation – standards of conduct: The Financial Markets Authority is trying to improve standards of conduct in financial markets. We think the government should take the initiative on the publication of investment performance returns and support better disclosure on fees. This is more than the disclosure of historical data and requires disclosure of the drivers behind the numbers. We wonder though, whether these will make any long-term difference to the management of collective investment vehicles. An old set of problems has been replaced by a new set.

Section 20

Information and Education

Information and education: One of a government’s five roles (section 11) is to gather and disseminate high quality data; another is to use that for information and education programmes. We already do some of the latter, but we need to know what’s happening – what works and what doesn’t. One problem is, again, the absence of high-quality data.

Section 21

The Review Process

The review process: Despite the six reviews since the present retirement policy review framework was established in 1993, very little has actually happened as a result.  The present three-yearly review needs to change and the Retirement Commissioner’s roles should return to those described in the 1992 Task Force’s report.  We need to discuss how that might happen.

Section 22

Policy Nirvana

Policy nirvana: Political positions on retirement income policies are an inappropriate way to resolve retirement income issues. We should aim for a 2023 version of the 1993 Superannuation Accord. We need first to strengthen the review process and establish its credibility as a way to facilitate public and political consensus. Again, gathering impeccable, deep data must be at the heart of that.