New Zealand retirement commissioner Diana Crossan has a message for the likes of Adair Turner who would advise politicians on pension reform: “You have to say it over and over again – people need to know it is happening.”
Crossan will be outlining her views at the ABI Saver Summit in London on November 2. She heads the Retirement Commission, an independent body set up by the New Zealand government to inform the public of the need to prepare for retirement.
She says her job is easier than it would be in the UK because of factors such as funding for the state superannuation scheme, the absence of means-testing and a degree of political consensus about reform.
“In the last three or four years, political consensus has been at its most stable. One former government dabbled in bringing back means-testing but the idea only lasted a few months because there was such an outcry.
“All the parties have acknowledged that, with the baby boomers coming to retirement, they will all have to do something to make sure we can afford it. But for the next 15 years it should be pretty stable. There is support at the edges for change but, in the core of the parties, nobody is saying this policy should change,” says Crossan.
This platform allows her to put out a simple message. She says: “My line is you have a base pension. You could live on that but, if you do not want to, you have to save.”
The Retirement Commission's main tool is a website which is backed with TV and national newspaper advertising. The website includes information targeted at a number of different groups such as students, those at retirement, women, parents and teachers.
The Retirement Commission does not simply promote stockmarket investing but also suggests to consumers that investing in property, a business or even in their children's education can be a way of providing for retirement.
The site includes 11 calculators for, among other things, debt, mortgages and to work out how retirement funds are performing. Visitors can also devise a savings plan. All visits are logged and surveys carried out to determine who is taking action following the visits.
The site has not provoked any concerns from financial advisers, who often use it themselves as a source of independent information.
Crossan says: “The acknowledgement is that because the New Zealand system does not have a lot of tax incentives or other incentives, people need knowledge, information and tools to help them save.”
She believes the industry may at times tend to use scare tactics about retirement. “The Retirement Commission is very careful about working with what facts we have got. The industry is constantly saying people are not saving enough but the facts we have got do not prove that. But we have got a good relationship with the industry. They build on what we do,” she says.
One of her aims is to get everyone speaking the same language. Crossan says: “One place I would like to get to in New Zealand is that we use the same language and the same facts and figures – we get past the rhetoric and down to what are the core facts. Then it becomes a mantra and gets said by enough people. Then it will be heard.”
But she reiterates that the task of public education may be easier in New Zealand. “One of your issues is the complexity of what you have started with. That makes it much harder for you.
“Our system has been pared back to be quite simple and, while we still have to talk about how we are going to manage it in the future, it is easier to see what the issues are,” she says.