All OECD countries have schemes that help people manage their retirement. Some of these schemes are mandatory, and are implemented through the tax system; others are voluntary but receive substantial subsidies. There is considerable variety across countries. While New Zealand has both mandatory and subsidised schemes, they are smaller than those in almost all OECD countries.
This note provides an overview of the reasons why governments intervene to help people manage their retirements, and the costs of these interventions. It then uses this cost-benefit framework to discuss the main options facing New Zealanders if they wish to change New Zealand’s retirement schemes as life expectancy increases.