MEDIA RELEASE
27 January 2004
ISI CALLS FOR GOVERNMENT ACTION IN WAKE OF PRG
REPORT
The Investment Savings and Insurance Association (ISI) wants
stronger recommendations and Government action from the findings presented in the latest
PRG 2003 report released in late December last year.
The Report, prepared by the Periodic Review Group, is only the
second such analysis on retirement savings since the Todd Task Force first identified the
looming retirement savings crisis 12 years ago.
ISI Chairman Simon Swanson, says the six yearly report findings
highlight the problems facing society’s aging population. "It is a critical time
for all parties to work with politicians and officials to secure the future of New
Zealanders. Government action from this Report is required as further procrastination will
only worsen the impact if we continue to simply debate the issue.
"The issues identified by the Todd Task Force back in 1992
are now upon us. We are in the midst of a retirement savings crisis that will only
accelerate unless key recommendations in the PRG Report are adopted. We need these to form
a platform for a work programme that will initiate change and assist New Zealanders in
their old age.
"The industry association is pleased to see that a number of
outcomes from the Saving NZ forum hosted by ISI in July 2003 have been adopted in the
report. In particular, the removal of existing tax disincentives that act against
increased personal savings through managed funds and the importance of workplace
savings", said Mr Swanson.
"However there is a distinct absence of action required from
the recommendations.
"While it is one thing to recognise that the future
situation for those currently under 50 in their retirement will be less secure, there were
no concrete solutions offered by the Report for the Government to consider", Mr
Swanson said.
The ISI strongly supports several recommendations made in report
and calls for the increased frequency of such reviews so that ongoing work programmes can
be developed and implemented.
"New Zealanders also need to understand that a married
person currently receives $11,688 (gross per annum) at age 65. This is only intended to
provide a basic income, and will require supplementary personal saving if a large
percentage of New Zealanders are going to achieve a lifestyle in retirement that meets
their needs. We are certain that a clear explanation of this benefit is required to help
many New Zealanders realise they must additionally put in place contractual personal
savings programmes", Mr Swanson noted.
"The PRG report contains a clear explanation of the
demographic transition into an older population age structure that is occurring in NZ.
This means more emphasis must be placed on increased personal saving and lower dependence
on New Zealand Superannuation as the primary source of income in retirement for the
majority of New Zealanders."
"We will be encouraging the need for public debate on the
age of entitlement and level of New Zealand Superannuation in the future as we believe
this matter is too important to be left to politicians alone. ISI advocates that those
currently in retirement and those approaching retirement must be given clear security that
their entitlements will be fully protected and cannot be changed. The ISI is committed to
working with all parties to ensure guidelines and actions are developed so that the
Report’s recommendations can be implemented with urgency", Mr Swanson said.
Ends.
For further information contact:
Simon Swanson, Chairman
