Clear views and clear words
Let's start with the good news: the findings of the Retirement Policy and Research Centre (RPRC) of the Business School at the University of Auckland. They had put an incredible lot of research into the topic of the treatment of overseas pensions and therefore the treatment of human beings who receive overseas pensions. The conclusion is:
People with overseas pensions are penalised
by Section 70 of the 1964 Social Security Act (SSA) and
the 2009 amendments to the New Zealand Superannuation
and Retirement Income Act 2001.
Of course, this news is not really good. The good thing - and therefore good news - is that finally experts the NZ government cannot dismiss as idiots or parasites have loudly addressed the problem. Those fellow researchers at the university are neutral researchers and not a lobby group, as we are. Nor are they immigrants.
This is important to mention because a significant proportion of the 52,000 people affected by Direct Deduction and Spousal Provision are born and bred Kiwis, and their number will grow in the future. It is no discussion about some foreigners' greed but a national problem that has to be solved in the face of the economic challenges New Zealand's ageing population poses.
The major findings, presented in the RPRC "Working Paper 2009-2. New Zealand Superannuation and Overseas Pensions: Issues and Principles for Reform" and released to the Human Rights Commission (HRC), are:
The RPRC has analysed complaints, policy, legislation and recommendations regarding the treatment of overseas pensions and of New Zealand Superannuation overseas (portability). Therefore the Working Papers do not only describe the status quo. They also provide a foundation for discussion of suitable principles to guide future decision making and policy formation.
At the Overseas Pension Forum in Auckland Claire Dale warned that in the face of increasing migrant flows "New Zealand must sort this enormously complex issue out urgently", as more and more people are coming into New Zealand to satisfy the need of skilled workers. RPRC co-director Susan St. John calls Section 70 "a time bomb".
Susan St. John and her fellow co-director Michael Littlewood presented two options for reform. This led to vivid discussions at the Overseas Pension Forum - with one clear favourite amongst the retirees and future pensioners who will miss out on NZ Super if Section 70 will not be dramatically changed or completely abolished in the future.
No endorsement of our website
We want to clarify at this point that the Retirement Policy and Research Centre (RPRC) of the University of Auckland is absolutely independent and does not endorse our website in any way. We do not even share the same views on several key issues.
The Retirement Policy and Research Centre (RPRC) is - according to its own definition - an academically focused centre specialising in the economic issues of demographic change.
The centre's sphere of interest includes:
1. public provision of retirement income (New Zealand Superannuation);
2. private provision (including KiwiSaver);
3. the accumulation and decumulation phases of retirement saving;
4. tax and transfer policy.
The RPRC contributes to public debate in regular breakfast briefings, submissions, working papers, articles, and regular newsletters.
The centre hosts PensionReforms, a website that fosters international debate on public and private pensions, tax, compulsory saving regimes, employment patterns and decumulation issues. This website, supported by many international contributing editors, is a great resource for researchers.
To "normal" people like you and us, however, the research is hard to understand in places. Meaning: there is some more "legalese" and theoretic approach to digest where some more practice-orientated views would be appreciated. Overall it demonstrates how nearly impossible it is to compare international pension schemes because it just is what it is: comparing apples with oranges.