Delay in Govt response to super future

The Retirement Commissioner is disappointed the Government is refusing to address concerns about the future affordability of superannuation.

The Government was due to report back last month on a review undertaken by the commission in 2007.

But Finance Minister Bill English and Minister for Social Development and Employment Paula Bennett told the commission it would not be responding, due to the change in economic climate.

"Given the significant impact of the global economic downturn we consider that it is important to review the Government's income policies in light of these changed conditions," the ministers said.

The commission's 2007 report said the Government should consider increasing taxes, reducing super payments or lifting the pension age.

The ministers said Treasury was working on a long-term fiscal outlook report, but any further concerns about superannuation would not be addressed by them until the commissioner's next review in 2010.

Retirement Commissioner Diana Crossan said the response was a disappointment.

"Both major political parties have said they won't alter New Zealand superannuation, but they need to say how they will fund increased future costs," Ms Crossan said.

Figures show the baby boomer generation will hit a retirement age peak by 2029 and by 2051 nearly 1.3 million people will be older than 65.

"Paying for New Zealand Superannuation in the future is either going to require new money or an adjustment to the current parameters of New Zealand Superannuation or else it's going to be a significant burden on future generations."

Ms Crossan said if the Government did not make a decision now or at least have a discussion about it something would "have to give" in the future.

The Australian Government announced this year it would be raising the age of eligibility for superannuation over the coming decades.

Ms Crossan said decisions should be taken now so those set to retire in the future could make plans for their financial security.

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