Funding of super entitlements unsustainable

The Employers and Manufacturers Association (Northern) has welcomed the acknowledgement by Labour Finance spokesman David Cunliffe at this morning’s Mood of the Boardroom briefing that New Zealand’s superannuation scheme is not sustainable at present levels.

“It was reassuring to hear that Labour is prepared to consider moving upwards the age when people qualify for retirement entitlements,” said EMA’s chief executive Alasdair Thompson.

“Mr Cunliffe acknowledged that super entitlements at their present level are not sustainable.

“Less impressive was his persisting in the idea that the government should borrow to pre-load the funding for superannuation entitlements.

“EMA’s view is that the issue is not just about reducing future liability for the payments as baby boomers retire, but more about encouraging them to stay on in the workforce longer.

“Our economy and society needs the work contribution, skills and experience of older people so we can ill afford to have them stop work at 65.

“Over the next 25 years some 70 million people in OECD countries will retire to be replaced by just five million newcomers.

“Prime Minister John Key’s comment that he would resign if he broke National’s promise to keep retirement entitlements unchanged was unfortunate if, for no other reason than New Zealand workplaces need the valuable contribution they make.

“In addition, since we are all living longer and so long as we remain in reasonably good health, there is every reason for to move the retirement age upwards.”