Source: The Treasury
The Treasury has published two Analytical Notes, the latest in a series of background papers to support the Treasury’s 2025 Long-term Fiscal Statement. These papers contribute to the evidence base underpinning public discussion of New Zealand’s long-term fiscal sustainability.
Investigating parametric pension reform in New Zealand using an OLG model (AN 26/05) (Andrew Binning, Murat Özbilgin, Christie Smith and Hanna Vu)
In this paper the authors use the Treasury’s OLG model to describe the macroeconomic, fiscal, and distributional effects that arise when New Zealand’s superannuation scheme is amended to moderate increases in superannuation expenditure. This Analytical Note focuses specifically on changing the age of eligibility from 65 years of age to higher ages. It also considers automatic rules for adjusting the age at which people become eligible for superannuation, in line with life expectancy or to stabilise public expenditure on NZ Superannuation.
Investigating pension indexation in an OLG model for New Zealand (AN 26/06) (Andrew Binning, Christie Smith and Hanna Vu)
In this Analytical Note the authors use the Treasury’s overlapping generations (OLG) model to describe the macroeconomic, fiscal, and distributional effects of three policy reforms that reduce New Zealand Superannuation (NZS) expenditure pressures:
- changing NZS indexation methods
- adjusting the pension replacement rate, and
- combining changes to indexation with an increase in the age of eligibility.
The scenarios presented are hypothetical analytical exercises designed to illustrate the mechanisms at play within the model rather than represent specific policy proposals.
The views, opinions, findings, and conclusions or recommendations expressed in these papers are strictly those of the authors. They do not necessarily reflect the views of the New Zealand Treasury or the New Zealand Government. The New Zealand Treasury and the New Zealand Government take no responsibility for any errors or omissions in, or for the correctness of, the information contained in these papers. The papers are presented not as policy, but with a view to inform and stimulate wider debate.