Wednesday, July 21, 2010

"Choice" on retirement

Don Brash has reared his ugly head again, this time suggesting that workers should be given a "choice" over their retirement age, with financial incentives to encourage people to keep working. Brash is quick to say that this isn't an attempt to screw people out of money - the incentive would be "actuarially equivalent to drawing the pension at the age of eligibility". So what's the benefit?

Brash seems here to be labouring under a preconception that being paid superannuation means that people stop working. That's not a legal requirement and while it was once the norm, that is changing. Older people who are still fit seem quite happy to collect their universal pension and work as well. This is effectively what Brash wants them to do, so why offer "choice"?

The only reason is to soften us up for an increase in the retirement age - an increase which would be unfair to Maori and unfair to the poor, who are more likely to die before retirement age. We know Brash doesn't care about those groups - his willingness to use racially divisive politics and his advocacy for the abolition of the minimum wage shows that clearly enough - but the rest of us should. A retirement benefit that is paid only to the rich and lucky is no benefit at all.