NEW ZEALAND: Should the retirement age be raised?

. WELLINGTON, New Zealand / Stuff.co.nz / Business Day / May 13, 2009 "People are voluntarily choosing to work beyond 65" By Adrian Chang - Business Day New Zealand must consider raising the retirement age says the Investment Savings and Insurance Association (ISI). The ISI said this today in the wake of Australia's overnight budget, in which the Government announced it would be raising the retirement age from 65 to 67. ISI chief executive Vance Arkinstall said it is inevitable that New Zealand will have to consider following suit. "New Zealand has very similar demographics to Australia. We have an ageing population, people are living longer and healthier lives, we have a more active lifestyle and we are placing greater demand on infrastructure and support services, particularly health services," said Arkinstall. He said there was already ample evidence that people are voluntarily choosing to work beyond 65 years of age and younger people do not expect the age of entitlement to superannuation payments to remain at 65. Arkinstall believes since it takes a very long time - at least 15 years - to implement changes to superannuation schemes without major disruptions, the process of considering changes to the age of entitlement must begin now. The ISI estimates the ageing population will push up superannuation costs from the current four percent of Gross Domestic Product to 9 percent by 2020. "It is inevitable that Government will need to manage costs of this nature. Increasing the age of entitlement to Government provided retirement benefits is one level that has been utilised by a number of western countries," he said. © 2009 Fairfax New Zealand Limited