A recently-launched ‘charity-of-charities’ plans to help plug NZ’s growing financial generation gap by channeling surplus government pension payments to groups combating child poverty.
Sarah Trotman, Spend My Super chief executive, said while many retirees depended on the universal NZ Superannuation income for survival, the government-funded payment was simply extra pocket money for others.
Trotman said about 1 per cent of those eligible for NZ Super have not applied for the pension “and maybe 2 to 3 per cent of the 600,000 or so superannuitants don’t need it at all”.
She said rather than refusing the pension, or frittering it away on personal spending, this wealthy group of older New Zealanders could redirect NZ Super payments (that range from about $318 to $380 per week) to the new charity.
“But we would like all those on NZ Super to see if they could give something – just $20 a week, perhaps – to help the next generations,” she said.
Spend My Super has selected 12 underlying charities that tackle tough child poverty, family dysfunction and inequality issues in NZ. The current crop of charities includes KidsCan, Women’s Refuge, Code Club Aotearoa and Lifewise Addiction Services.
Trotman said all donations flowing through Spend My Super end up in the underlying charities.
Over 90 per cent of retirees donated something in the last year, she said, but the multi-charity approach – similar to a fund-of-funds model – likely provided a higher level of assurance and accountability than most individual donation strategies.
“We do due diligence on all the charities, we have a national coverage and we will review them each year for their impact and how well they have promoted Spend My Super,” Trotman said.
By international standards NZ Super is a generous government pension system providing a solid floor against old-age poverty.
But the fact that wealthy retirees also have access to the non means-tested NZ Super has grated some commentators, and added ammunition to the inter-generational media wars.
NZ Super is also the biggest single government expense, accounting for $15.5 billion of spending in the May 2019 budget – a figure destined to ramp up along with the aging population.
“Over the full nine year period spanning 2014/15 to 2022/23, [NZ Super] expenditure is expected to increase by $6,877 million (59%); this reflects both the number of people being expected to increase by 208,000 (31%), as well as accumulated inflation and wage adjustments,” a paper accompanying the budget says.
Spend My Super could help rebalance some of the NZ Super inequities, Trotman said.
She encouraged NZ investment and financial advice businesses to promote Spend My Super as a charitable vehicle for both industry insiders and among their respective retiree clients.
Following a distinguished business career, Trotman was awarded an ONZM (Officers of the NZ Order of Merit) in the 2017 New Year Honours round.