The Press TUESDAY, APRIL 30, 1974 A superannuation alternative

Press, Volume CXIV, Issue 33521, 30 April 1974, Page 12

The Press TUESDAY, APRIL 30, 1974 A superannuation alternative

T'; alternative proposed for the Superannuation Bill b; the New Zealand Employers' Federation might not find general approval: the federation has, at least, done much more than most other groups which have so far appeared before the Parliamentary Select Committee hearing submissions on the bill. As well as criticising —in general and in detail — the federation has offered an alternative scheme which, on the face of it. appears to provide benefits at least as good, and without many of the shortcomings, of those proposed in the bill.

Criticism of the bill, not all of it well-founded, ne from an unusually large spectrum of New Zealand society Its general object —to ensure a more secure old age for most New Zealanders —is not in question. But the bill as it stands would by no means ensure that this would apply universally: it has disadvantages which include an embarrassingly large investment fund in the hands of a corporation ultimately controlled b\ the Government of the day. inequities towards those whose earning life has been short or who have not been fortunate enough to fall within an optimum pattern of earning, and manifest unfairness towards those New Zealanders who have already joined superannuation schemes of their choice without knowing that the benefits they expected to receive on retirement would, in many caies. be altered by Government fiat in the interests of what the Government calls “a new era of self •' responsibility ”.

The employers’ scheme might not be the best possible cither. Like the Government plan, it includes a generally improved universal superannuation benefit paid for from taxation, but it would leave the second tier of benefits in the hands of employers to organise while allowing voluntary participation from employees. This should encourage the kind of responsible concern for old age which the present bill obviously seeks, while allowing those who prefer to consume income as they receive it free to spend and to contemplate a reduced old age with only the universal benefit to sustain them. The proposal that ail superannuation would be portable through a central clearing house also meets one of the Government's requirements. While it would be less administratively cumbersome than the Government's plan — though it might still involve computerised registration of every adult — it should ensure that no giant fund is controlled by a few people. Funds for investment would remain in the hands of the administrators of each superannuation scheme, whether it be privately administered, a life office scheme, a group employer scheme, or the National Provident Fund.

The employers have demonstrated that alternatives which meet the general criteria for the Superannuation Bill are possible; some of the shortcomings which have brought widespread criticism of the bill can be overcome by a little imagination and departure from party dogma. This should encourage the Government to reconsider the form and the urgency of the scheme which has been put forward in the bill. To digest and appraise fairly the weight of material which is appearing before the Select Committee ought to take much longer than the Government has allowed. The introduction of the superannuation scheme — amended to take account of the recommendations from the Select Committee — must surely be postponed beyond the scheduled April 1, 1975. If the scheme were now scheduled to start on April 1, 1976, it could be considered m its final form by the electorate at next year's General Election: and this would be entirely appropriate for a scheme of this magnitude.