The Government Superannuation Fund
New Zealand lawmakers took seven minutes to make their pensions a national shame.
In his book “Rewarding Service: A History of the Government Superannuation Fund” (University of Otago Press 2002), author Neil Atkinson examines the various stages in the New Zealand government’s employee pension schemes with emphasis on the GSF which had its genesis in 1948. One of the aims of the GSF was to encourage and reward lengthy employment in the public service and allow state employees to retire with dignity.
Some groups, including senior civil servants and Members of Parliament, were accorded special treatment and Atkinson reminds his readers of the inglorious “Dead of Night” seven minutes in 1987 (the same year as the decision in the infamous Roe Case), in which Members of Parliament on both sides of the House passed massive improvements in the superannuation of Parliamentarians and senior civil servants.
The scheme was never fully funded; the state legislated to supply the extra money for the pensions of top civil servants and politicians from general taxation. Concerns about the size of the contingent liability eventually caused the closure of the scheme to new members in 1992.
The GSF is a second state-funded pension.
In “Rewarding Service”, Atkinson’s facts as presented lead to a disquieting comparison. The superannuation privileges available to longer-serving civil servants and those who have been in Parliament for several years are essentially government-sponsored and -administered pensions topped up by the taxpayer.
The majority of overseas pensions subject to section 70 of the Social Security Act 1964 are no different from the GSF in that both are government-sponsored programs. It would seem logical therefore - if section 70 were fairly applied - for GSF pensions to be deducted from NZ Super entitlements. It is both ironic and cynical under the circumstances that these pensions are in fact exempted. The only tangible differences between overseas pensions subjected to section 70 and the GSF is that the latter is both tax-free and topped up by the taxpayer: overseas pensions are neither.
The authorities targeting the pensions of a minority, ostensibly to diminish the burden on the New Zealand taxpayer, have been feathering their own nests at the expense of the New Zealand taxpayer.
The GSF currently has 72,000 members. It consists of 48,000 annuitants - but only 24,000 contributors (for more information visit: www.gsfa.govt.nz ).
The shortfall between what is contributed and what is paid out costs the
The burden to the taxpayer is considerably reduced by the revenue gained through appropriating overseas pensions.
Former Social Development Minister David Benson-Pope was asked if the revenue derived from the direct deduction of overseas pensions is used to subsidize the pensions of civil servants - including the pensions of those authorities responsible for retaining and enforcing section 70. He replied, “It is not used directly.”
Among those benefiting from the 1987 inglorious “Dead of Night” are the former Prime Minister, Rt Hon Helen Clark, and the former Speaker of the House, Rt Hon Jonathan Hunt. When asked if it was appropriate to be accepting NZ Super payments in addition to his handsome parliamentary salary, Mr Hunt rounded indignantly, “But it is my right!”
In his time as Speaker, Mr Hunt acknowledged having received detailed information outlining overseas pensioners’ loss of their right to NZ Super. Though fully informed as to the gravity and the extent of the injustice, he made no attempt whatsoever to address it.
No Minister has ever provided a satisfactory explanation as to why those who expect to keep their partial overseas pensions and receive NZ Super are accused of double dipping whereas senior Parliamentarians and civil servants enjoy supplementary rewards without stigma.
Addressing a Grey Power meeting in
“The general principle behind this legislation is that if someone is entitled to an overseas pension they must apply for this pension in order to diminish the cost of their NZ benefit or pension. This is of advantage to the NZ taxpayers as our scheme is taxpayer funded, unlike many overseas schemes which are based on voluntary or compulsory contributions.”
It is not surprising the former government was anxious “to diminish the cost”. Without the massive contribution the appropriation of overseas pensions provides, taxpayers would long ago have demanded to know why a pension perk over and above NZ Super should consume more than 2% of their taxes.