Super. Bill keeps main Govt aims

Press, Volume CXIV, Issue 33588, 17 July 1974, Page 2

Super. Bill keeps main Govt aims

ch Zealand Press Assoctation

WELLINGTON, July 16.

Changes made to the New Zealand Superannuation Bill did not detract from the Government’s main objectives in introducing the bill, said the Minister of Finance (Mr Rowling) in Parliament today.

Proposing the second reading of the bill. Mr Rowling said these aims had been to provide wage-related and cost of living adjusted pensions in retirement for the whole of the work force, and to ensure that those benefits were not lost when a contributor changed his job.

‘•The bill provides a third! vital sector in a three-part policy for meeting the real needs of the people of this, country in times of adversity; and when they reach retirement,” said Mr Rowling. “The first part we have had for many years in the social security scheme which provides extensively, but not, exclusively, for those who! are unable to help themselves.

Accident scheme “The second part is the accident compensation! scheme, which offers protec-' tion for those injured and their families in cases of personal accident. “Now we have the third part, the New Zealand) superannuation scheme which provides a basis for all those now in the workforce who are not part of a superannuation scheme, to be able to provide for their retirement. and to know that this provision will be fully I protected against the inroads of inflation.” New Zealand had a very; good social security system judged by overseas standards, said Mr Rowling. But even the best social security benefits could only provide for basic needs or look after■ those who had been unable! to make satisfactory pro-j vision through no fault of their own.

Supplementary “It is desirable if salary or wage earners are to main- i tain their standard of living’ when they retire, to supplement their social security! benefits. "In other words, all employees need to make savings I while they work for their re-j tirement. and one of the best! ways of achieving this is by I making contributions to a I superannuation scheme, with j their employer also con-' tributing.” Mr Rowling said the fact that many good employers recognised the need and provided worth-while superannuation schemes, should

not absolve other employers from responsibility, thus leaving their employees dependent only on social security benefits on retirement.

Funded basics The Government had without hesitation based the scheme on the cash accumulation principle. The principle of cash accumulation allowed the life offices and others to promote a satisfactory partnership in a competitive environment. Also it ensured the continuation of all worth-while existing schemes since most private schemes were run on a funded basis. Mr Rowling said he was convinced that the scheme as now reflected in the amended bill would not only satisfy the bulk of the genuine critics, but effectively do the job that needed to be done. “It will give least disturbance to existing superannuation schemes, and it will ensure reasonable standards including levels of contribution, transfer values between schemes and emerging benefits,” he said.

Cum pet it ion “It will provide competition between both the public and private sectors, and will permit a range of schemes tailored to parti-1 cular occupational needs. “It will also give employees; and employers a range of choice of benefits above a reasonable minimum pension, and will provide in respect of both private and public schemes a means of obtaining cost of living protection.” Mr Rowling said many | changes had been made in the lbill to encourage the idea of [partnership between the New I Zealand scheme and private j schemes, even if this meant the flow of funds to the New Zealand scheme might be lower than previously estimated.

Discussing the fund to be! created by the scheme, Mr! Rowling said that even with'

investment limits the fund would not have any difficulty in finding suitable investments, nor would it disrupt the market, as its cash flow would not be excessive, especially in the early years. In a young country, the superannuation contributions to all funds would give a necessary and desirable I stimulus to the development lof an expanding economy.