Headline: Many issues in Flexi-Super
The Council of Trade Unions Secretary, Peter Conway says that there are many issues to consider in the proposal for flexible superannuation.
Peter Conway says that unions will want to make a submission on this issue and will have many concerns.
“While it offers more choice, the huge concern is that for low income workers the pressure to get some additional income will mean they opt for the lower rate even if it is not the best option for them in the long run”.
It could therefore worsen income inequality.
“While it is true that many manual workers are exhausted before the age of 65 years, so are many other workers who have had intensive work over many decades. While an early payment of NZ Super could be attractive for these workers initially, they may end up seriously disadvantaged”.
Peter Conway said there is also evidence that for many people the level of NZ Super is already too low. Around 40 percent of those aged over 65 years rely entirely on NZ Super and for another 20 percent they get 85 percent of their income for NZ Super.
“There are other issues including the fact that Government contributions to KiwiSaver (member tax credits) cease when there is an entitlement to withdraw savings, a person cannot get ACC and NZ Super at the same time and also there would be an impact on other benefit entitlements a worker could otherwise receive now prior to age 65.”
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