The purpose of this Accord is to achieve consensus on the retirement income policies to be implemented in New Zealand.

Retirement income policies should be stable, certain, and sustainable, so that people can plan properly for their retirement.

An adequate and equitable amount of income should be available to every retired New Zealander who meets the current qualification requirements (being requirements that are similar to those in force at the date of this Accord).

People should be encouraged to save for their retirement through the availability of appropriate savings products, supported by education and the provision of information about retirement matters; but should not be compelled by law, or given tax incentives, to do so.

Retirement income should continue to be provided in an integrated way from both private savings and public funds.

The Government should continue to negotiate appropriate international reciprocal agreements with the objective of providing equitable treatment for people eligible for retirement income in or from New Zealand.

The existing legislation relating to National Superannuation (referred to as “New Zealand Superannuation” in this Accord) should continue in force in all material respects, except as otherwise provided for in this Accord.

National Superannuation should in future be known as “New Zealand Superannuation”.

In order to maintain its purchasing power, the rates of payments of New Zealand Superannuation should be adjusted in line with annual movements in prices. Subject to any modifications made under this Accord, this principle should be given effect to by continuing to adjust the after-tax rates of payments of New Zealand Superannuation annually by the same percentage as the change in the Consumers Price Index.

Furthermore, in order that all retired New Zealanders may continue to enjoy a reasonable level of participation in and belonging to the community, the level of New Zealand Superannuation payments should be within a range of average wage levels. This means that the income of those who receive New Zealand Superannuation should maintain a fair relationship with the income of those in the paid work force. Subject to any modifications made under this Accord, this principle should be given effect to as follows:

The net amount provided from public funds for a retired person should reduce as that person’s total income increases.

As the Parties have differing perspectives in regard to the implementation of the principle in clause 2.4.1, it should be implemented in regard to New Zealand Superannuation by either—

The effectiveness and integrity of the existing surcharge on income should be reviewed periodically with a view to reducing avoidance opportunities.

The level of income at which the surcharge commences to apply should be reviewed from time to time, and adjusted if necessary, so as to maintain its value.

The existing legislation which gradually increases the age of eligibility for New Zealand Superannuation to 65 should continue in force.

To recognise the circumstances of people who were approaching age 60 at the time of announcement of the legislation referred to in clause 2.5 and whose expectations were changed by that legislation, there should be new legislation providing for a “Transitional Retirement Benefit” from 1 April 1994 for those persons who were born before 1 April 1939 and who meet the New Zealand Superannuation residence requirements. The benefit should—

To recognise the circumstances of the small group of people who commenced drawing a life insurance annuity or private New Zealand pension before the commencement of the legislation referred to in clause 2.5 (1 April 1992) and whose expectations were changed by that legislation, there should be new legislation providing that those people should from 1 April 1994 have only 50% of those annuities or pensions included for social security income testing, if they—

Publicly provided retirement income (being income provided from public funds which is primarily conditional upon age) should consist only of New Zealand Superannuation and, from 1 April 1994 to 31 March 2004, the Transitional Retirement Benefit.

In accordance with the purpose and principles set out in Part I, the amount of publicly provided retirement income should be assured but within the bounds set out in this Accord. Accordingly no Party should alter, or agree to alter, in a material way publicly provided retirement income, except as provided for in this Accord.

However, clauses 2.7.1 and 2.7.2 are not intended to prevent any Party—

so long as the purpose and effect of those changes is not inconsistent with any of the provisions of, and does not undermine, this Accord.

A stable taxation regime is an important component of a policy conducive to long term savings.

Accordingly, the current income tax treatment of savings known as the TTE Regime (where, in general, contributions to savings are not deductible for tax purposes, earnings on savings are taxed, and payments to savers are tax free) should continue to apply.

In regard to New Zealand taxation and the surcharge, a foreign-sourced private pension should have no advantage or disadvantage over a New Zealand-sourced private pension.

Wherever practicable, steps should be taken to give effect to the principle set out in clause 3.2.1. However it is recognised that the differences between New Zealand and foreign tax regimes and the constraints of existing international agreements can make this difficult to achieve.

Having considered the recommendations of the Task Force, the Parties agree that in respect of unit trusts, superannuation schemes, life insurance, and other financial investment products offered to the public (referred to as “savings products” in this Accord), legislation should be enacted to provide that—

Following the recommendations of the Task Force, legislation should be enacted to require disclosure by financial advisers of their qualifications, experience, financial interests, and procedures for handling client funds.

There should be a person or persons to whom complaints and disputes about any kind of private savings can be referred by any New Zealander for speedy and low cost resolution.

The preference of the Parties is that the principle in clause 5.1 be achieved by the appointment of one Savings Ombudsman.

At present various private sector banking and insurance organisations have appointed or propose to appoint ombudsmen to consider complaints and disputes about private savings.

The Retirement Commissioner should review the appointments referred to in clause 5.3.1 and the kinds of private savings that are within the jurisdiction of those ombudsmen, and report by the end of 1994 on the need for a statutory Savings Ombudsman.

Following the recommendations of the Task Force, legislation should be enacted to provide for an independent Retirement Commissioner.

The Retirement Commissioner should—

Each Retirement Commissioner should be appointed for a term that ends on the completion of the first periodic report prepared under clause 6.2 following his or her appointment. Reappointment of a person as Retirement Commissioner should be permitted.

The Retirement Commissioner should prepare annual reports, and the responsible Minister should lay each such report before the House of Representatives.

The functions of the Retirement Commissioner should be as follows:

Reports on the retirement income policies set out in this Accord (called “periodic reports”) should be delivered to the responsible Minister by 31 December 1997 and at 6 yearly intervals thereafter.

The periodic reports should be prepared by a group comprising representatives of non-Government sectors (of whom one should be appointed as chairperson), officials, and the Retirement Commissioner. The group should be appointed by the responsible Minister, after consultation with all the Parties.

The terms of reference for each periodic report should be set by the responsible Minister, after consultation with all the Parties.

Without limiting clause 6.2.3, the first periodic report should—

As soon as practicable after receiving a periodic report, the responsible Minister should lay a copy of it before the House of Representatives.

The Parties intend to abide by this Accord in accordance with its purpose, spirit, and intent. In particular, each of the Parties intends—

This Accord encompasses retirement income policies and is not intended to prevent a Party adhering to or adopting policies in other areas (for example, health, housing, and education).

This Accord is not intended to prevent a Party adhering to or adopting a policy that is inconsistent with this Accord if the inconsistency is not material.

This Accord is not intended to create legal rights.

Any Parliamentary Party that is not already a Party to this Accord may become a Party by a supplemental document signed on behalf of that Parliamentary Party and each of the Parties to this Accord.

Any Party that proposes an addition or amendment to any or all of the provisions of this Accord should—

This Accord may be added to or amended by a supplemental document signed on behalf of each of the Parties.

Any Party that proposes to withdraw from any or all of the provisions of this Accord should—

If a Party who has given notice of proposed withdrawal under clause 7.4.1(a) still wishes to withdraw after having complied with clause 7.4.1(b), it may do so by giving written notice to this effect to each of the other Parties.

In this Accord—