A super story

by Listener Archive / 25 December, 2010
As NZ Superannuation comes under scrutiny, here's a best-practice "encore career".

As Father Christmas embarks on his annual rounds, this is an especially apposite time to celebrate older workers because, depending on where he is domiciled for tax purposes, Father Christmas is by now likely to be eligible for an old-age pension. He seems certain to be older than 65, meaning if he were a New Zealander he would be receiving New Zealand Superannuation. And because ours is a universal allowance, he would get it on top of whatever income he earns in his permanent casual employment at the North Pole.

New Zealand Superannuation has been a talking point recently because Retirement Commissioner Diana Crossan has recommended that to keep the scheme affordable, the age of eligibility should gradually rise to 67.

There are good demographic reasons to consider this. Currently about one in eight people, or 13%, is aged over 65, but by 2050 that ratio is expected to increase to 1:4, or 25% of the population. Most importantly, the ratio of people of working age per person over 65 will go from 5:1 to 2.3:1 by 2061 (yes, we know, it would be a struggle to be 0.3 of a person at the best of times, let alone while trying to support the older population).

These equations do not automatically mean New Zealand Superannuation will become unaffordable, but it will be less affordable as more people receive it and fewer people are contributing the tax to pay for it. An older population also experiences greater health needs just when many elderly people are priced out of private health insurance. That means increasing demand falls on the public system.

However, the picture is not solely negative. New Zealand Superannuation and our high levels of home ownership are two reasons New Zealand has a low level of poverty among older people.

As Treasury Secretary John Whitehead said recently, there is no problem with New Zealand Superannuation per se, but it would be prudent from time to time to look at its settings. Prime Minister John Key has ruled that out on his watch, even though many other countries are looking at their pension provision - including Australia, the Netherlands, Denmark, the US and Germany, which have announced increases in the age of pension eligibility in the 2020-29 decade. If this government does not do it, the task will probably fall to a future one.

More people are continuing to work after turning 65. Some, doubtless, are doing so through economic necessity and would rather not. Many, sadly, who lost savings in finance company collapses are in that boat. Still others simply go on in the careers they have always had because they like not only the income, but the social contact, friendships and sense of purpose their employment provides.

Others would like what is now being called an "encore career" - perhaps part-time or seasonal work, as Father Christmas has.

Clearly, Father Christmas is one of those who works because he chooses to. Who has not seen the grin on his face in pictures of him at work? His workplace, full of little people and elves, operates a proactive anti-discrimination policy welcoming people of different physical abilities, sexual orientation and age.

But for some of his contemporaries, the biggest barrier to workforce participation is not their own abilities but employers' prejudices about older workers.

Despite carrying - it has to be said - a little too much weight, Father Christmas has maintained a robust good health, which enables him to keep up the heavy travel schedule his work demands.

However, as employers of older people often lament, Father Christmas is a slow adopter of new technology. He still prefers clients to write to him by post rather than to text, tweet or Facebook. This will make Michael Cullen, as chairman of New Zealand Post, and himself in an encore career, very happy.

But Father Christmas prefers a reindeer-drawn sleigh even when jet engines would enormously cut his travelling time on Christmas Eve. No doubt there are cost-cutters somewhere benchmarking his productivity and questioning his ability to interface with the strategic management matrix. Is this dude adding value?

The answer is a resounding yes. The oldest baby boomers start turning 65 next month, and Father Christmas sets each of them a fine example of how to dismiss the concept of a retirement age, and simply do what you enjoy for as long as you can. We wish him, and you our readers, a very Merry Christmas.


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