Duncan Garner: Aussie teachers retire with $2.5m. Why does NZ get superannuation so wrong?

Have you heard about the Australian couple, aged 59 and 61, both teachers, who recently retired with a combined $2.5 million in private savings accumulated through their national superannuation savings scheme?

Can you ever imagine having that much and retiring that early as a teacher in New Zealand? Actually, not just teachers but most one of us, no matter what we do for our day job. You can retire on that comfortably and you’re still young enough to enjoy a decent quality of life. The world is suddenly open to you.

I’ll acknowledge that I read about this couple on the social news website Reddit and we need to be careful about taking what we read on social media sites as gospel truths, but this got me thinking about the difference between our attitudes to superannuation and that of our Australian cousins.

If ever you wanted evidence of the massive wealth chasm that has opened between Australia and New Zealand, then this could be it.

Because of the Australian super scheme, where the government compels employers to put 11.5% of workers’ earnings into a super scheme (rising to 12% in July), the amount of savings people retire with tends to be much higher. Australian employers have no choice, and it is compulsory – all workers must be enrolled. There is also a means-tested age pension for those with limited superannuation funds.

That’s not to say every Australian is looking forward to a cushy retirement. The Association of Super Funds of Australia says only 30 per cent of Australians have enough super to retire comfortably, but I’d argue there’s more opportunity for them to save for their senior years because of the superiority of their government super fund.

Here, we’ve become compliant and too uninterested in matters that really affect us, like retirement savings. New Zealanders need to be less apathetic and more focused on demanding from our government a better deal.

Wealth remains in the hands of a few and no one wants to rock the boat, but if we want better futures, especially in old(er) age, we need to make some noise and lobby for change, and hold our elected officials to account if that change doesn’t come.

The Aussie pension fund now has A$4.2 trillion (NZ$4.63 trillion) invested – in numbers, that looks like 4,200,000,000,000 – the fifth-largest pension fund on the planet. In September New Zealanders had $112 billion invested in KiwiSaver and a further $76 billion was squirrelled away in the NZ Super investment fund to subsidise future fortnightly pension payments (which are not means-tested but nowhere near enough to live on). The combined balance is not insignificant but chump change in comparison to A$4.2 trillion.