Working paper series

The following are working papers on various aspects of superannuation, ACC, and tax policy in New Zealand.

2019 | 2018 | 2016 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010 | 2009 | 2008 | 2007


Intergenerational impacts: the sustainability of New Zealand Superannuation, Susan St John and Claire Dale

An assessment of the impact of current retirement income policies on current and future generations, with due consideration given to the fiscal sustainability of current New Zealand superannuation settings.

Decumulation: Time to act, Susan St John and Claire Dale

An Assessment of decumulation of retirement savings and other assets, including how the Government can ensure New Zealanders make the most of their money in the decumulation.


Improving intergenerational equity in New Zealand, M Claire Dale 2018

Existing and anticipated regional and ethnic variation in ageing and the issues arising are explored along with evidence of the prevailing intergenerational inequity in New Zealand. A survey of existing local and international measures aimed at increasing intergenerational equity and justice is followed by some concluding remarks.


Ageing and the economics of caring

The Retirement Policy and Research Centre is pleased to publish this Working Paper, which builds on presentations by the Retirement Policy and Research Centre’s Dr M.Claire Dale, and Associate Professor Susan St John, at the NZ Dementia Summit 5-6 November 2015, Te Papa, Wellington.

  • Ageing and the economics of caring

    This working paper builds on presentations by the Retirement Policy and Research Centre’s Dr M.Claire Dale, and Associate Professor Susan St John, at the NZ Dementia Summit 5-6 November 2015, Te Papa, Wellington.

New Zealand’s KiwiSaver Lessons for Ireland

The Retirement Policy and Research Centre is pleased to publish this Working Paper that was originally presented to Insurance Ireland’s summit “A universal pension for Ireland” held in Dublin on 13 September 2016.


Options for Dis-saving ‘Safely’

‘Decumulation’ and ‘dis-saving’ are terms for spending down some or all of the assets accumulated prior to retirement. Since the late 1980s’ reforms to the taxation of saving, New Zealand has paid little or no attention to the decumulation phase of retirement saving, and opportunities for realistic annuitisation of accumulated wealth have all but disappeared.

Improving the affordability of New Zealand Superannuation

This Working Paper examines a way in which the tax system could be used to provide an increased claw-back of some or all of the net cost of NZS from high-income recipients.


Now we are six. Lessons from New Zealand’s KiwiSaver
St John, S, Littlewood, M, Dale, M C
New Zealand’s success with the "soft compulsion" of automatic enrolment is continuing to influence the design of opt-out schemes in the United Kingdom and Ireland. However, six years after its introduction, fundamental questions around KiwiSaver’s purpose and design have not been resolved.

Turning silver to gold: Policies for an ageing population
M.Claire Dale

In New Zealand, the population aged 65+ is projected to almost double from 635,200 in 2013 to 1,100,000 before 2030. The paper compiles the current state costs of services and support for this group and suggests possible policy options that could be applied in the future to ‘turn silver to gold’: to anticipate increasing numbers of older citizens with enthusiasm or at least equanimity rather than dread. 



Fiscal sustainability in an ageing population: Adapting universal provision
St John, S.
To ensure the future fiscal sustainability of New Zealand Superannuation, raising the age of eligibility is often highlighted for urgent consideration. This is not the only policy lever available to improve affordability, nor is it necessarily the most equitable. A subtle mix of the three possible parametric changes: the qualifying age, the level and the degree of targeting, may be preferable.

Save as you go or pay as you go? The age old policy debate
St John, S.
The debates around how policy should change in New Zealand have been intense. One of the critical debates is about the future role of KiwiSaver and its integration with New Zealand Superannuation. For example, Andrew Coleman, a Motu and Treasury economist, has written at length about the need to change from a Pay As You Go to a Save As You Go approach for the state pension, using arguments drawing on rates of return and intergenerational equity.



Financing of long-term care and long-term care insurance for the aged: A literature-based comparison of seven OECD countries
Dale, M C, Hanna, J, St John, S.
Demographic change is exerting pressure on labour market, health, pension and retirement policies across the developed world. In particular, the current systems of funding the provision of in-home and institutional long-term care will be a considerable pressure point as the proportion of the population aged 65+ grows rapidly over the next 20 years. For example, in New Zealand, the elderly population is projected to almost double before 2030, from the current 600,000 to 1,100,000 for those aged 65+ and from the current 26,800 to 49,900 for those aged 90+.

New Zealand Superannuation and Overseas Pensions: Reform Option 2
Littlewood, M and Dale, M C
As populations become more mobile, pension portability becomes more important. Most countries accrue a citizen’s entitlements to a state-provided pension by reference to contributions, periods of employment, pay or other similar measures. A "complete" record produces a full pension. When there is a reciprocal agreement between the countries involved, periods in different countries can be accommodated. New Zealand’s universal age pension requires only a relatively brief period of residence after age 20 so, on grounds of fairness, rules are in place to reduce the New Zealand pension where a claimant has accrued entitlements to a state pension in another country.



KiwiSaver: Four years on
Dale, M C, St John, S, and Littlewood, M.
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.



Reform Option 2: New Zealand Superannuation and Overseas Pensions (2010 - 4)
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.

Reform Option 1: Reforming New Zealand Superannuation for a mobile trans-Tasman population (2010 - 3)
St John, S, Dale, M C.
This working paper was presented at the 18th Annual Colloquium of Superannuation Researchers: Retirement saving choices: challenges for indviduals, industry and public policy. 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, the United Kingdom, 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.

KiwiSaver the first three years: Lessons for Ireland? (2010 - 2)
St John, S, Littlewood, M, Dale, M C.
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.


Towards a more rational tax treatment of collective investment vehicles and their investors (2010 - 1)
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.



New Zealand superannuation and overseas pensions: Issues and principles for reform
Dale, M C, Lazonby, A, St John, S, Littlewood, M.
This is 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.

Literature review: New Zealand superannuation and overseas pensions 
Dale, M C, Lazonby, A, St John, S, Littlewood, M.
This is 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.



The distributional impact of recent changes to retirement income policy - a preliminary analysis
St John, S, Littlewood, M, Meehan, L.
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.

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. 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.



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.

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.