Unions join call for super, at 65

Press, 11 May 1989, Page 6

Unions join call for super, at 65

PA Wellington Trade unions have joined the call to raise the age for national superannuation entitlement from 60 to 65. The Council of Trade Unions presented its own option in a submission which rejects the five options for future superannuation set out late last year by the Minister of Social Welfare, Mr Cullen. The five options were merely bases on which politicians could tinker with the wellbeing of the elderly, it said. The C.T.U. option included a

flexible retirement age, with 65 being qualification for national superannuation. A work test would be applied in that the retiree must have worked no more than 20 hours a week for the previous six months. An employer-contributory, union-negotiated scheme would bridge the gap between the actual age a person retired at and the State-paid pension. The fixed link between the pension and the average wage should be broken and instead tied to a formula responding to changes in productivity.

Given past rates of productivity growth and the technological revolution, the real level of superannuation could rise. It should not slip too far below its present relative relationship to the average wage. The council said the Government should encourage people to save for their retirement by restoring the attractiveness of superannuation schemes. This could be done by removing the withholding tax on employer contributions and restoring some form of tax incentive for individuals to save.

The C.T.U. said Social Welfare had adopted too narrow an approach with its options, taking the view that it was possible to design a policy that could last into the second half of next century. It failed to take into account the changes that could happen in the labour market in that time. Dr Cullen has rejected both the C.T.U. and Roundtable approaches as not facing up to the need for society to spend more on retirement allowances to maintain a reasonable standard of living for the growing number of elderly.