Flexi-Super ‘aint quite there

I personally like the idea of Peter Dunne’s Flexi-Super…but something is not quite sitting right with the concept.

I get the impression we are hearing a collective sigh of relief that all of a sudden, someone has finally addressed the ‘issue’ with Super that everyone has been talking about for the past few years. Problem is, this doesn’t address it.

The major issue has been that the economy cannot afford Super with our aging population, and as we are being told that this is fiscally neutral, it does nothing to address that. That being said, Dr. Don Brash said on Radiolive this morning that he wasn’t so sure if it would be neutral, but unless the Government, via Mr. Dunne, is trying to slip a reduction in costs past the country, then this doesn’t ‘fix’ the issue of cost.

The other thing about it is that I think the majority of people will take this at 60, not wait. Can we please see some projections about that?

My rationale is this.

If my wife and I take Super at 60 we get $403 a week, if we wait until 70 we get $885 a week and there is a sliding scale for the decade in between. If we take $403 a week we have received nearly $210,000 before we reach 70 and take a cent. This would then take us another four and a half years to catch up to before we are then better off. So we wouldn’t see a benefit of taking Super at 70, until we are close to 75 and with the average life expectancy being 80 in NZ at the moment, who would be willing to take that financial risk.

I like the idea of giving people the choice and I like the idea that people groups who have shorter life expectancies could get Super earlier but I have major concerns that New Zealanders are going to think the ‘problem’ with Super is solved, and it’s far from it.