Business School
PensionBriefing papers
PensionBriefing papers from the Retirement Policy and Research Centre (RPRC) are technical papers on various aspects of superannuation, ACC and tax policy in New Zealand.
Copies of RPRC PensionBriefing papers are available to view in PDF format from the Other publications database by Publication type: Papers and presentations. Keyword: pensionbriefing.
Search for copies of RPRC briefing papers from the Other publications database
2012-1 Part of our pensions past: The 1898 Old Age Pension
New Zealand introduced the "Old Age Pension" in 1898. It was one of the first countries to do so. The pension was non-contributory, payable from age 65 (potentially to all residents) but there was a long list of conditions, including income and asset tests. A magistrate established entitlements in open court and newspapers printed the names of successful applicants and the annual amounts awarded.
2011-2 Updating the NZSF investment performance numbers to 30 June 2011
RPRC PensionBriefing (2010-6) estimated that the cost to taxpayers of the New Zealand Superannuation Fund since it began was about $1.9 billion at 30 June 2010. This PensionBriefing updates the analysis to 30 June 2011. At that date, the NZSF had passed the "hurdle rate" for the first time since 2008. However, losses in the three months to 30 September 2011 have still left taxpayers out of pocket over the NZSF’s lifetime since 2003.
2011-1 The future of Accident Compensation (ACC)
A one-day ACC Forum: The future of ACC, was held on 26 August 2011 in the Owen Glenn Building at The University of Auckland Business School. The event was co-hosted by The University of Auckland’s Retirement Policy and Research Centre and ACC Group, the ACC Futures Coalition, and AUT’s Centre for Occupational Health and Safety Research. This PensionBriefing provides a short summary of each presentation, with links to the slides, papers and reading resources available from the Other publications database and the RPRC and ACC Group websites.
2010-7 Improving the affordability and equity of New Zealand Superannuation
Raising the age of eligibility for New Zealand Superannuation is widely seen as necessary for fiscal sustainability. The Retirement Commissioner has reinforced this view in her 2010 Report. This PensionBriefing examines the way in which increasing the degree of targeting might also contribute to reducing the fiscal cost while also addressing some of the current intergenerational inequities of New Zealand Superannuation.
2010-6 Updating the NZSF investment performance numbers
Unless the New Zealand Superannuation Fund’s investment returns are more than the cost of government debt, it worsens the government's overall financial position. This PensionBriefing updates an earlier analysis of its investment performance to 30 June 2010. The NZSF has missed the ‘hurdle rate’ by an accumulated $1.8 billion since it started in 2004.
2010-5 Household wealth in Australia and New Zealand
The debate in New Zealand about compulsory private provision has restarted. Advocates for compulsion point to Australia as a success story; it has had full compulsion for 18 years and a lesser version for a further six years. Despite claims to the contrary, households' assets and liabilities in the two countries seem to share more overall similarities than differences.
2010-4 How much will New Zealand Superannuation really cost?
When discussing the future affordability of government expenditure on the old like New Zealand Superannuation, what matters is whether New Zealand's economic output grows sufficiently to support the increasing claims of the growing aged population. Showing costs as a proportion of New Zealand's future economic output is one way of expressing that connection. That presents a less alarming picture.
2010-3 A comment on investment income, tax, welfare benefits and the 2010 Budget
The 2010 Budget changed some aspects of the tax treatment of investment income, but its focus on rationalising the top tax rates and on property investment means there is more work to be done if overall equity is to be restored to the tax and benefit systems. Most of the issues raised by the RPRC's Working Paper 2010-1 have yet to be addressed.
2010-2 What do New Zealanders own and owe? News from SoFIE 2004-2006
The RPRC's latest PensionBriefing looks at the assets and liabilities of all New Zealand households over 2001-2006. In a 2009 Treasury report, key findings at 2006 include:
- Less than half (49.6%) of New Zealanders' total assets were in housing.
- Financial and business investments totalled 35.2%.
- Total debt was 13.9% of total assets in 2006.
2010-1 How much do New Zealanders invest in residential rental properties?
The Tax Working Group's 2010 report claimed that New Zealanders over-invested in residential rental properties. The report suggested that the $55 billion in listed local shares compared unfavourably with the $200 billion in residential rental properties. But how much do New Zealanders really have invested in that sector? The evidence is not definitive but the answer is likely to be less than half that claimed by the Tax Working Group: $60-$100 billion looks more realistic. Whether that amount is "over-investment" by households is another issue.
2009-6 Modelling the distributional aspects of KiwiSaver: methodology and results
The taxpayer-funded subsidies to KiwiSaver are distributed to members based on the contributions made by individuals and their employers. Over time, the subsidies that relate to the employers' contributions become relatively more important as the real value of the fixed-dollar "member tax credit" diminishes. The KiwiSaver Excel Spreadsheets allow the impact of these to be modelled, and highlight aspects of the KiwiSaver scheme that could have substantial distributional implications now, and in the future as the scheme matures.
2009-5 Universal New Zealand Superannuation and tax: implications for sustainability
New Zealand has a universal state pension for all residents from age 65 who satisfy minimal residency tests. The simplicity and efficiency gains of paying a relatively generous universal pension without any income test comes with a high fiscal cost. The quid pro quo of universal provision is usually high marginal taxes on the well-off. In light of the ageing of the population and recent tax changes, including KiwiSaver and PIEs, the coherence of universality may need to be revisited.
2009-4 If I won $5 million
Structuring investments to maximise after-tax income illustrates the growth of complexity and resulting inequities in the current tax environment. PIEs and registered superannuation schemes can be used to structure investments to maximise after-tax returns.
2009-3 Structuring remuneration to maximise value through "salary sacrifice"
This briefing paper outlines the way in which remuneration can be structured to maximise the net income without extra cost to employers. It takes the example of an employee receiving total remuneration of $150,000 a year from an employer that is willing to co-operate.
2009-2 Superannuation schemes, tax and "income"
This briefing paper describes the different types of superannuation schemes that New Zealand now has, and the different definitions of "income" that may affect income tax and the interaction between individuals and the welfare system.
2009-1 International comparison of poverty amongst the elderly
This briefing paper examines some New Zealand implications of a 2008 OECD report Growing Unequal? Income distribution and poverty in OECD countries.
