NZ pension system?

jerjon · Posted: Fri Apr 30, 2004 2:56 am Post subject: NZ pension system?

I am curious if anyone can give me some information on retirement and the pension system in NZ. Here in the States we have the Social Security system which we pay into through tax deductions taken out of our earnings. I am 42 and will be eligible for retirement when I am 67, by all reports there will be no money left in the Social Security system by then. I also have concerns about paying for health related costs if and when I could retire. My older sister recently retired but then had to return to work part time because of the cost of medical insurance and healthcare (UK readers: anytime a US corporate heath care provider like Kaiser or Health Net comes in and says that privitising the NHS will bring better healthcare through competition...don't believe it!). I hate the thought of perhaps never being able to stop working just to pay for health care, medications, insurance etc. I figure I have 20+ years of work left in me; if the NZIS ever lowers the scores for the SMC then I might have a chance of emigrating and perhaps ensuring a better future for myself. Of course there are numerous private retirement schemes here in the States (many tied to the volitile stock market). What is the situation in NZ?

Raeven · Posted: Fri Apr 30, 2004 4:27 am Post subject:

Hi, jerjon,

As a fellow US citizen, I have similar concerns to yours. My husband and I are migrating to NZ as soon as we are able (he is a NZ citizen).

I looked into these areas as well, and as best I can determine, NZ has a pension scheme which enables anyone who has worked in the system for at least 10 years, 5 of those years past the age of 55, to participate. However, any pension you collect from NZ is offset by pensions you receive from other sources -- i.e., social security and/or private pensions which you are eligible to collect. I don't recall the amounts you can receive under NZ's pension scheme, but as best I remember, it's not a princely sum. And in speaking with someone roughly my age in NZ (47), I learned that NZ citizens have many of the same concerns we have here regarding social security -- that it won't be available by the time they reach an age to receive benefits. So who can say?

With respect to health care, it's true there is national health care available to all citizens of NZ and permanent residents. However, this applies to hospital care only. Many New Zealanders carry private health insurance to offset the costs for doctor's visits, maintenance prescriptions and dentistry, dentistry being particularly dear as I understand.

Obviously, this is the primary reason New Zealand discourages migration by older persons. As things stand, one in four New Zealanders is over the age of 65, and there is much concern that there will not be a large enough young work force to pay for the twilight years of the older generation in times soon to come. Personally, we intend to maximize our opportunities to earn money while in New Zealand and be as self-supporting as possible in our older years. With luck, we won't need to depend on either the US social security debacle or NZ's pension scheme! Still, we are comforted by the fact that as New Zealanders, should either of us suffer some major physical calamity, we will not be bankrupted by hospital costs.

I am certain that others on this message board are far better informed than me on these issues, and I know they will post.

Best of luck to you in your pursuit of lifestyle bliss! - Rae

JCM · Posted: Sat May 01, 2004 11:30 am Post subject:

Hi guys, my understanding is that if you receive a state pension paid by another country, this will result in your NZ pension being adjusted downwards by however much the other country pays you.

If, however, you are receiving a private pension, paid by a former employer for example, you can receive this plus you still get the full NZ state pension. Nice One

Raeven · Posted: Tue May 04, 2004 2:57 am Post subject:

Hi, JCM,

Thanks so much for clarifying our questions regarding the NZ pension scheme!

I was not aware that NZ pensions weren't offset by private pensions, so that may be of particular interest to me -- though I'll have to check it out further. I was employed for many years as a judge's assistant and am eligible some years hence for a (too-small!) pension owing to that employment. It is funded through the Public Employees' Retirement System in California and is considered here to be a "private" pension, separate and apart from the federally funded Social Security program. Because of your comments, I will check further into how it will be viewed by New Zealand. Might be good!

This message board and its administrators are just awesome -- always the best information available! Thanks again so much.

Rae

jerjon · Posted: Wed May 05, 2004 3:09 am Post subject:

Thanks for all the info! I too am in the PERS retirement system so it is good to know that would not offset a pension earned in NZ. Lots of things to investigate! This forum is a great wealth of knowledge!

Robert · Posted: Thu May 06, 2004 7:19 pm Post subject:

Hi all.

My PFA tells me that here in NZ, you will receive a $20K pension subject to qualifying criteria and that this is funded through tax. As stated above it is reduced by other state pensions and will not rise with inflation. Basically forget it as you would be hard pressed to live on 20K today let alone in a few years.

The same chap also tells me health insurance cover for GP visits pays out 20% of its premiums so you are 5 times better off saving the cash in a savings account and using it to pay as and when. Compare this with the UK where GP visits are free but you pay 8% NI to cover the costs....

Ch Ch GP costs: Visit $10 under 6 $25 under 17 $45-60 adult $70 nights $50 extra if you need a house visit. All blood tests etc are free for residents but x-rays need paying for (from $0-30 for accidents and up to $80 otherwise) Ultrasound scans cost about $170. Most pregnancy care is free.

Dentistry is not so dear (certainly by UK standards) I paid a dentist $300 for a large filling, scale and polish, x-rays etc, taking over an hour of his time. This was at a city centre practice and is considered by locals to be a very high price to have paid. I am informed that fillings cost from about $100 (free for school age children when done at school). (christchurch)

Raeven · Posted: Wed Jun 02, 2004 4:25 am Post subject: Thank You!

Hi, Robert,

Somehow I missed your reply when you posted it and only just found it today while searching for additional discussions on US social security benefits. I have a headache from trying to sort it all out, and your post helped to clarify a few things!

I agree that no one would or could live comfortably on $20K NZ/year, but considering that by leaving the US and migrating to NZ, my US social security benefit will be reduced to something under $10K US/year, it's not looking so bad. In our own situation, any state-sponsored pension benefits will be supplemented by 2 private pension benefits, so hopefully we won't be shopping for groceries in the dog food aisle! Operative word: Hopefully.

Anyway, thanks for the information on costs for doctors' visits, blood tests, x-rays and other. It really helps to make an informed decision on these matters.

All the best, Rae