Working paper series

Working paper 2011-2: KiwiSaver: Four years on
The working paper surveys the four years of KiwiSaver’s evolution. In that time, the fundamental questions around KiwiSaver’s purpose have not been resolved. Is it to enhance an individual's ability to consume in retirement; to reduce the pressures on the economy of an ageing population; or to solve the national saving problem. When the purposes are unclear, the scheme may be vulnerable to the industry determining the design of the scheme to meet its own objectives.

Working Paper 2011-1: Overseas pension: The next steps
Dale, M C, St John, S, Littlewood, M, Smith, A.
This is RPRC’s final paper on the overseas pension project. The working paper makes specific recommendations for a reform of the inequities and anomalies that currently exist in overseas pensions policy. Some recommendations are for administrative change, and should be implemented immediately. Other recommendations require a significant policy change and should be informed by a national debate prior to legislative change. The Retirement Policy and Research Centre encourages the government to act with urgency in 2011.

Working Paper 2010-4: Reform Option 2: New Zealand Superannuation and Overseas Pensions
Littlewood, M & Dale, M C.
On behalf of taxpayers, the New Zealand government has a role to ensure the fair treatment of older citizens, including those who have lived and worked overseas. Therefore, there is logic to the state's taking some account of the entitlements to overseas pensions that perform a similar role to NZS, regardless of the way in which those pensions have been framed or funded; or are paid.

Working Paper 2010-3: Option 1. Reforming New Zealand Superannuation for a mobile trans-Tasman population
St John, S, Dale, M C.
18th Annual Colloquium of Superannuation Researchers: Retirement saving choices: challenges for indviduals, industry and public policy. UNSW Sydney, 12-13 July 2010.

New Zealand and Australia take a unique approach to state pension provision that marks them out from the countries that have been the traditional source of settlers such as Canada, UK, Ireland and the Netherlands. This uniqueness derives from an entitlement solely based on residency and not contributions. Even so, there are stark differences between the Australian and New Zealand state pensions which raise an important set of issues for movements between these two countries.

Working Paper 2010-2: KiwiSaver the first three years: Lessons for Ireland?
St John, S, Littlewood, M, Dale, M C.
In June 2010, Susan St John presented this RPRC working paper at Trinity College Dublin. Other countries are interested in KiwiSaver because it is the world's first auto enrolment national opt out scheme. The Irish are thinking of introducing a similar scheme and this paper was written for the Pensions Policy Group at Dublin.

Working Paper 2010-1: Towards a more rational tax treatment of collective investment vehicles and their investors
Chamberlain, M, Littlewood, M.
The Retirement Policy and Research Centre's latest working paper explores the New Zealand income tax treatment of different forms of saving. That treatment is now complex, costly, distortionary and expensive to regulate. The total tax paid by savers directly and indirectly can often bear little relationship to the tax payable had all income been earned directly. This paper recommends that all income is aggregated and taxed at the saver's appropriate marginal tax rate. Any income-tested elements of state-provided payments would be based on a measure of all "income" and not, as now, only some "income". This would bring New Zealand closer to the principle of comprehensive income taxation in which ability to pay is measured by all income.

Working Paper 2009-2: New Zealand superannuation and overseas pensions: Issues and principles for reform
Dale, M C, Lazonby, A, St John, S, Littlewood, M.
Part Two of a two part project by the Retirement Policy and Research Centre for the Human Rights Commission.

This paper explores the background of current pension policy, especially pension portability. It appears that pension policy in New Zealand has developed in an ad hoc manner, often without public consultation, and often with unintended consequences. An analysis of complaints, policy, legislation and recommendations regarding the treatment of overseas pensions and of New Zealand Superannuation overseas provides a foundation for discussion of suitable principles to guide future decision making and policy formation.

Working Paper 2009-1: Literature review: New Zealand superannuation and overseas pensions
Dale, M C, Lazonby, A, St John, S, Littlewood, M.
Part One of a two part project by the Retirement Policy and Research Centre for the Human Rights Commission.

This literature review surveys recent academic and government publications in New Zealand and overseas relating directly and indirectly to pension portability and migration. The purpose of the review is to provide the foundation for the forthcoming Retirement Policy and Research Centre (RPRC) working paper: New Zealand Superannuation and Overseas Pensions: A first principles approach to developing options to improve equity. That working paper, which draws on Lazonby (2007), an earlier RPRC working paper, will analyse the existing complaints, policy, legislation and recommendations regarding the treatment of overseas pensions.

Working Paper 2008-2: The distributional impact of recent changes to retirement income policy - a preliminary analysis
St John, S, Littlewood, M, Meehan, L. (2008)
The Retirement Commissioner's 2007 Retirement Income Review warned that "KiwiSaver has brought additional complexity and new fiscal risks, because of the high cost of the generous new incentives." This working paper quantifies the value of the tax-funded incentives and subsidies for individuals who save under various hypothetical scenarios. The preliminary modelling shows how the future value of these subsidies and incentives varies by income, age and employer contribution. This paper concludes that they will have a regressive and unequal impact. The Retirement Policy and Research Centre recommends that this aspect of KiwiSaver should be reformed, and sooner rather than later. Further work is under way at the Retirement Policy and Research Centre to extend this analysis.

Working Paper 2008-1: Lessons from New Zealand for Ireland's green paper on pensions
Hughes, G.
Ireland and New Zealand both have a population of around 4 million but the economy and per capita living standards are about 60 per cent larger in Ireland than in New Zealand (see Table 1). Home ownership rates are quite high in both countries, especially for older people. Life expectancy at age 65 in Ireland is about three years less than in New Zealand for both men and women.

Although both countries have a commitment to maintaining living standards in old age the balance between public and private provision is struck very differently in the two countries. As the epigraphs suggest, this reflects fundamentally different conceptions of the role of the state in pension provision. In Ireland there is a consensus that the role of the state is to help the social partners to develop a national pension system for workers whereas in New Zealand there is a consensus that the role of the state is to provide security in old age for citizens.

Working Paper 2007-2: Passing the Buck, The impact of the direct deduction policy on recipients of overseas pension benefits in New Zealand
Lazonby, A.
Of the approximately half a million New Zealanders over the age of 65, around 51,000 are entitled to at least two public pensions, one from New Zealand, and at least one other from abroad. This means that around 10% of superannuitants are subject to the direct deduction policy as set out in section 70 of the Social Security Act 1964. Section 70 mandates a dollar-for-dollar abatement of New Zealand Superannuation entitlements against a superannuitant's, or the spouse's, overseas entitlement. This treatment, has been increasingly perceived as out of step with the times and inequitable by the individuals affected. This paper reviews the origins of the direct deduction policy, its rationale and its impact on those receiving one or more pensions from overseas.

Working Paper 2007-1: The changing face of the Aged Care Sector in New Zealand
Lazonby, A.
The aged care sector has been described as a sector in crisis. Recent years have seen a rash of closures of charitable aged care providers, constant calls to raise the Residential Care Subsidy, and frequent strikes amongst nurses and informal carers due to poor pay and conditions. This report investigates the "Aged Residential Care" market, examining its origins, present structure, and the issues it currently faces such as those arising from the ageing population. While the sector is found to be in the throes of considerable transition rather than crisis, it is important that suitable planning for the demographic changes ahead is undertaken now.