Policy Initiatives
Ongoing Retirement-linked Work Programme 2006
Public provision
- Confidence and Supply Agreement with NZ First:
- NZ Superannuation and Veterans Pension Bill
- Rates Rebate
Private provision
- "Securing your future":
- Provision of financial services:
Regulation: ensuring trust
- Regulation of Financial Intermediaries
- Review of Regulation of Non-Bank Financial Products and Providers
- Review of Domestic Institutional Arrangements
- Code of Practice for Home Equity Release Products
Financially literate population
- Sorted.org.nz
- Investigation of Adult Financial Knowledge
- Generic Financial Education Programme in support of KiwiSaver
Other policy projects
Research
- KiwiSaver Evaluation Programme
- Monitoring Living Standards of Older New Zealanders
- Fiscal Modelling of New Zealand Superannuation
- Home Equity Release Research
- Wealth Accumulation by Households
- Decumulation
Ensure that the net married couple rate of New Zealand Superannuation is set at not less than 66% of the net average wage.
Investigate ways to improve options for senior citizens who may be eligible for foreign pensions as well as New Zealand Superannuation.
Develop a card that can be used to identify the holder's eligibility for all public sector entitlements, and which is also capable of being used for claiming negotiated commercial discounts.
The purpose of the Bill is to:
- Extend eligibility for the higher single or single living alone rate of New Zealand Superannuation or Veteran's Pension to all superannuitants and veterans' pensioners living in the community who have a spouse or partner in long-term residential care
- Clarify the rules for entitlement to the living alone payment by removing the 'sharing expenses' rule
- Increase the length of time a person can continue to receive NZ Superannuation or Veteran's Pension while overseas and working voluntarily for an aid agency from 52 to 156 weeks
- Enable all rates of Veteran's Pension to be increased by Order in Council
It is intended the Bill will be enacted by 1 July 2006.
The means-tested rebate available in respect of local authority rates is to be enhanced from 1 July 2006 by increasing the amount claimable and extending the income limit.
The KiwiSaver scheme will require employers to enrol new employees in a work-based, locked-in to age 65 savings scheme, unless the employee specifically opts out. Members will contribute 4% (default) or 8% of salary; there is no compulsory employer contribution, but provision will exist for optional payments.
Scheme structure is based around using existing savings providers and Inland Revenue's PAYE tax systems, with the intent of keeping compliance costs to a minimum.
The Bill giving effect to KiwiSaver was introduced into the House on 27 February 2006, and it is intended KiwiSaver will commence from 1 April 2007.
In parallel with the passage of the Bill through Parliament, there will be:
- A tender process for default providers
- Development of a communication strategy around Kiwisaver
A package linked to KiwiSaver is being finalised, to come into effect three years after the introduction of KiwiSaver.
This review is being led by tax officials to consider the differences in taxation of savings in various forms of collective investment funds, and to make proposals for greater consistency.
Craig Stobo provided an initial report. A further report has been prepared setting out a Government position, and a significant number of submissions have been received. Officials are consulting on the final policy option with the intention of including legislation in a tax bill to be introduced in May this year.
Review of the Specified Superannuation Contribution Withholding Tax Rules
Inland Revenue and Treasury have put out an issues paper on the use of salary sacrifice arrangements using employer contributions to superannuation.
Transparency of Financial Service Fees for Consumers
The Retirement Commission has investigated ways in which to produce and publicise information to make apparent the effects of fees on savings fund returns. The next stage is to provide a process for evaluating and comparing the actual fees being charged.
The Regulation of Financial Intermediaries
The Financial Intermediaries Task Force final report was released by the Ministry of Economic Development in August 2005. In December 2005 Cabinet agreed in principle to the co-regulatory model. The next step is detailed design work to get clearer policy proposals on:
- The application of the regime
- Exact roles and responsibilities of intermediaries, approved professional bodies and the regulator
- Dispute resolution, discipline and standards of practice.
Review of Regulation of Non-Bank Financial Products and Services
The Ministry of Economic Development is leading a project to consider regulation of superannuation schemes, insurance, securities, and other non-bank financial institutions.
Decisions on the review are expected by the end of 2006, with legislation enacted by 2008.
Review of Domestic Institutional Arrangements
Treasury is looking at how the regulatory regime can best be administered, in conjunction with the work on regulation of non-bank financial products and providers. Decisions are expected by the end of 2006.
Code of Practice for Home Equity Release ProductsIncreased interest in home equity products, driven to a considerable extent by new market entrants, has brought into focus the matter of regulatory oversight of such products. The Office for Senior Citizens has produced a briefing report for its Minister, and commissioned further investigatory work.
The Office for Senior Citizens is developing a discussion paper for consultation with the public in 2006.
The Retirement Commissioner continues to develop and update this internationally well-regarded financial education website.
Investigation of Adult Financial Knowledge
The Ministry of Economic Development and the Retirement Commissioner have supported a survey carried out on personal financial knowledge by ANZ.
Generic Financial Education Programme in Support of KiwiSaver
Financial education focussed on the specifics of the KiwiSaver design has been identified as essential for the success of the proposal. The Retirement Commissioner will lead this project, working with other agencies.
The Office for Senior Citizens is currently reviewing amendments to the Enduring Power of Attorney legislation contained in the Protection of Property and Personal Rights Act 1988.
Issues of an Ageing PopulationFollowing on from a symposium held by the Ministry of Social Development in early 2005, a number of papers on the issues of an ageing population are to be collected and published.
The Ministry of Social Development is investigating initiatives to enhance employment opportunities for older people.
KiwiSaver Evaluation Programme
An evaluation programme for KiwiSaver is being prepared by Inland Revenue, in conjunction with Treasury, the Ministry of Economic Development and the Ministry of Social Development. This will provide important information as to what works and what does not, and is likely to be of international interest. Strategy and terms of reference are in the course of development.
Monitoring Living Standards of Older New Zealanders
Ongoing work by the Ministry of Social Development to assess where older New Zealanders are positioned relative to other New Zealanders, and to better understand the characteristics of older people with low living standards.
Fiscal Modelling of New Zealand Superannuation
Modeling of New Zealand Superannuation is being carried out by the Ministry of Social Development and Treasury.
As part of the development of a Code of Practice for Home Equity Release products, the Office for Senior Citizens, in conjunction with the Retirement Commissioner, is supporting an investigation into attitudes to the use of equity release products.
Wealth Accumulation by Households
A research project looking into the patterns and determinants of household wealth accumulation, and the implications for retirement incomes, is being supported by Treasury.
Preliminary work on a review of the existing facilities for converting accumulated financial assets into income, and identification of any gaps, has begun with the support of the Retirement Commissioner.