2 July 2012 For Immediate Release

New Zealand actuaries have key role to play in addressing worldwide retirement tsunami

Governments worldwide are faced with the challenge of how they will fund the retirement of an ageing population, according to the Actuaries Institute Australia President David Goodsall, who has recently visited New Zealand.

“With the increase in life-spans we all know a massive problem is heading our way. How are we going to fund the future needs of an ageing population?”

To add to the challenge, Mr Goodsall says countries around the world are struggling with this issue at a time when it is difficult to focus on long term solutions.

“Election cycles are only three or four years long so it’s challenging to make what could be expensive changes now to solve a problem much further down the track, especially if it will lose a government votes in the short term,” he said.

However, some governments have already made good progress in tackling this issue. In the UK, for example, they are contemplating linking the social security pension age to life expectancies. The Australian Government has also made some tough decisions, raising compulsory contribution rates for workers from 9 to 12% of salaries and increased the Age Pension age from 65 to 67.

“We appreciate every country is different and we can’t simply adopt a ‘one size fits all’ global solution. But this reinforces the need to draw upon the strengths of experts, such as actuaries, on the ground to help to change the way we handle retirement issues now and in the future,” he said.

“We are encouraged the Australian government has invited the Actuaries Institute to sit on their roundtable to discuss these matters and become part of the solution. We believe Actuaries in New Zealand have a key role in this debate, and Governments should be leveraging our expertise in solving these very difficult problems around the world.

“While changes to current parameters are a great start, we need a fundamental shift in the way we look at retirement and the debate needs to start seriously now,” Mr Goodsall concluded.

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