Financing New Zealand Superannuation

Brian McCulloch and Jane Frances ()
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Jane Frances: New Zealand Treasury, https://treasury.govt.nz/

No 01/20, Treasury Working Paper Series from New Zealand Treasury

Abstract: The New Zealand Superannuation Fund is being established as a means of smoothing out the impact on the rest of the Crown’s finances of the transition that will take place over the next fifty years to a permanently higher proportion of the population being eligible for New Zealand Superannuation, the universal pension paid to New Zealanders over the age of 65. This paper discusses the financial issues surrounding the determination of the contributions that the Government would be required to make to the Fund over time in order to meet this objective. The calculation of the required contribution rate is derived as a function of future expected entitlement payments, future expected nominal GDP, future expected investment returns, and the Fund balance. Estimation issues are discussed and the implications of volatility in investment returns are examined. Some issues in assessing long-term expected returns are addressed in an appendix.

Keywords: pension fund; capital markets; investment returns; social security; retirement income (search for similar items in EconPapers)
JEL-codes: C23 G1 H55 (search for similar items in EconPapers)
Pages: 41 pages
Date: 2001
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:nzt:nztwps:01/20

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