Monday, August 26, 2013

Compounding disadvantage

Peter Dunne has released his new flexible superannuation policy, and he thinks Maori and Pacific Peoples will benefit from it:

The proposal allows people to choose to take a reduced rate of NZ Super from the age of 60, or an increased rate if they defer taking up superannuation until they reach 70.

"Flexi Super lets people choose for themselves when they want to take up superannuation without being told by the government when they should or should not retire," Mr Dunne said.

"Maori, Pasifika and other demographic groups with shorter life spans would benefit most," he said.

Really? Yes, they'd be able to retire five years earlier - but they also die five years earlier. So if they retired early, they'd be paid the pension for just as long, but be paid less every week for doing so.

This "flexibility" simply seems to result in compounding the existing disadvantage of reduced life expectancy. Its obvious to anyone who thinks about it for an instant. What this says about Dunne's policy development process is left as an exercise for the reader.

Update: The full document is here [PDF], and oddly it doesn't even mention this problem. I guess nobody in United Future or Treasury bothers to think about the effects of their policies on poor or brown people.