# 2026 OECD Source Brief — Pensions at a Glance: NZ Country Notes | Field | Detail | | ------------------ | ----------------------------------------------------------------------------- | | **Type** | OECD source brief — pension data, replacement rates, and system design for NZ | | **Status** | Reference | | **Date** | June 2026 | | **Classification** | Neutral business/campaign intelligence | --- ## Overview This brief compiles and interprets New Zealand's country-level data from the OECD Pensions at a Glance series, the definitive international benchmark for retirement income systems. NZ's pension system is structurally unique among OECD countries: it has **no earnings-related public pension tier**, relying instead on a universal flat-rate pension (NZ Superannuation) supplemented by a voluntary private savings scheme (KiwiSaver). **Primary sources:** OECD (2023), _Pensions at a Glance 2023: OECD and G20 Indicators_ — https://www.oecd.org/publications/pensions-at-a-glance-2023-c2a5b62d-en.htm AND OECD (2025), _Pensions at a Glance 2025_ — https://doi.org/10.1787/e40274c1-en --- ## Why This Matters for NZ The OECD Pensions at a Glance data is the most frequently cited international benchmark by NZ policy makers, Treasury, the Retirement Commission, and advocacy groups. Understanding how NZ ranks and where the data comes from enables advocates and analysts to: - Frame NZ's pension system in international context - Anticipate the arguments Treasury will make about fiscal sustainability - Counter misconceptions (e.g., that NZ Super is unusually generous) - Support evidence-based policy positions on pension age, means-testing, contribution rates, and adequacy --- ## Key NZ-Relevant Data and Findings ### Pension System Structure NZ is one of only **two OECD countries** (with Chile) that has **no earnings-related public pension**. Most OECD countries have a multi-tier system: - **Tier 1:** Basic/universal pension (like NZS) - **Tier 2:** Earnings-related public pension (NZ has none) - **Tier 3:** Voluntary private pensions (KiwiSaver fits here) | Feature | NZ | OECD Typical | | ---------------------- | ------------------------------------------------------- | ---------------------------------------- | | Public pension type | Flat-rate, universal | Earnings-related, contributory | | Financing | Pay-as-you-go from general taxation | Social insurance contributions | | Coverage | Residency-based (10 years after age 20, 5 after age 50) | Contribution-based (usually 30-40 years) | | Indexation | Wage-linked (net average wage) | Price or wage-linked, varies | | Tax treatment | Taxable on receipt | Mixed; some tax-free, some taxable | | Voluntary private tier | KiwiSaver (≈75% coverage) | Mixed; mandatory in some countries | Source: OECD, _Pensions at a Glance 2023_, Country Note: New Zealand. ### Public Pension Spending | Metric | NZ | OECD Average | NZ Rank (of 38) | | -------------------------------------------------- | ----------------------- | ---------------------- | ---------------- | | Public pension spending (% GDP) | ~4.9% | ~8.0% | ~30th (low) | | Public pension spending (% of total govt spending) | ~12% | ~18% | ~28th | | Spending growth projection (2030) | ~5.5% GDP | TBD | Below OECD trend | | Spending projection (2060) | ~8% GDP (Treasury est.) | ~10-12% GDP (OECD avg) | — | Sources: OECD, _Pensions at a Glance 2023_; Treasury NZ, _Long-Term Fiscal Statement 2025_. **Key observation:** NZ's low current spending is due to the flat-rate design, not because the system is underfunded. However, as the population ages the cost will rise to ~8% GDP by 2060 without policy changes — roughly where today's OECD average stands. This rise has been described by Treasury as "the most significant fiscal pressure on the Crown's accounts." ### Replacement Rates The **net replacement rate** measures pension income relative to pre-retirement earnings after taxes and contributions. | Income Level | NZ Replacement Rate (2025 OECD) | OECD Average (2025) | NZ vs OECD | ||-------------|-------------------------------|--------------------|------------| || 0.5x average earner | 67.0% | 75.4% | Below average | || Average earner | 43.8% | 63.2% | Well below average | || 2x average earner | 23.7% | 52.9% | Significantly below | Sources: OECD, _Pensions at a Glance 2025_ (Table 4.4), published 27 November 2025. **⚠️ Critical update — 2025 edition:** The OECD's 2025 edition reports that the poverty rate among people aged 65+ in New Zealand has **doubled** since the 2023 edition of Pensions at a Glance. This is attributed to benefit settings — NZ Super is a flat-rate universal pension, so its purchasing power relative to average wages has not kept pace with rising living costs. | Income Level | NZ Replacement Rate (2023 OECD, for comparison) | OECD Average (2023) | ||-------------|--------------------|--------------------| || 0.5x average earner | ~50% | ~70% | || Average earner | ~39% | ~62% | || 2x average earner | ~21% | ~54% | Source: OECD, _Pensions at a Glance 2023_. **Important context:** NZ Super is designed as a **floor**, not a full replacement. KiwiSaver and private savings are expected to supplement it. The low replacement rates for high earners are by design — NZ Super is redistributive. ### Wealth and Assets of Older Households | Metric | NZ | OECD Average | | ------------------------------ | ---------- | ------------- | | Homeownership rate (65+) | ~80% | ~70% | | Median net wealth (65+) | ~$400K NZD | Varies widely | | Housing equity share of wealth | ~60% | ~50% | Source: OECD, _Pensions at a Glance 2023_; MSD, _Meeting the Future Needs of Older New Zealanders_ (2025). **NZ-specific dynamic:** High homeownership and housing wealth partially offset low pension replacement rates. However, the trend is towards lower homeownership among future cohorts of older people (increasing mortgage debt into retirement), which will put pressure on pension adequacy. ### Pension Age || Metric | NZ | OECD Average | ||--------|----|-------------| || Current normal pension age | 65 | 64.7 (men, 2024 data) | || Future normal pension age (by 2050) | 65 (legislated) | ~66-67 (many moving to 67) | || Effective exit age from labour force | ~67 | ~65 | Source: OECD, _Pensions at a Glance 2025_. **Note:** Many OECD countries are legislating increases to pension age (67 in Australia, UK, Germany, Denmark; 67-68 in Italy, Netherlands). NZ's age 65 is becoming relatively young by international standards. The OECD's 2026 Economic Survey of NZ recommends linking pension age to life expectancy (with a cap of 69). ACT has proposed raising it to 67. The Coalition Agreement requires the government to introduce a bill raising the age to 67 from 2044, though NZ First opposes any change. ### Old-Age Poverty | Metric | NZ | OECD Average | | ------ | --------------------------------------------- | ------------ | ------ | | | Poverty rate (65+, after taxes and transfers) | ~12% | ~13.5% | | | Poverty rate (75+) | ~10% | ~15% | | | Gini coefficient (65+) | ~0.26 | ~0.30 | Source: OECD, _Pensions at a Glance 2025_ (Recent pension reforms chapter). **⚠️ CRITICAL NEW FINDING:** The OECD's 2025 edition reports that "the poverty rate among people aged 65+ in New Zealand has doubled since the 2023 edition." This was approximately ~12% in 2023 and is now estimated at around 24%. The OECD attributes this to benefit settings — the flat-rate NZ Super's purchasing power relative to average wages has been eroded by wage growth and rising living costs. This is a major policy-relevant finding for advocacy around NZ Super adequacy. **NZ-specific dynamic:** NZ Super previously was effective at preventing deep poverty among older people (poverty rate slightly below OECD average), but the 2025 edition shows this is no longer the case. NZ now likely has a higher old-age poverty rate than the OECD average. This data point will be critical for advocacy ahead of the 2026 election. --- ## Political Relevance ### How the Data Is Used in NZ Policy Debates | Argument | OECD Data Point Used | | -------------------------------------- | --------------------------------------------------------------------------------- | | "NZ Super is unaffordable" | Spending projected to rise from 4.9% to 8% GDP (but this is today's OECD average) | | "NZ Super is too generous" | Replacement rates are below OECD average — difficult to sustain this framing | | "We need earnings-related super" | Point to OECD average replacement rate of 62% vs NZ's 39% | | "Raise the pension age" | OECD trend towards 67; NZ is becoming an outlier | | "KiwiSaver needs higher contributions" | Compare NZ 3% min to Australia's 11.5% Super Guarantee | ### Current 2026 Context - **Treasury's 2025 Long-Term Fiscal Statement** projects NZS costs rising from 4.9% to 5.8% GDP by 2040 and ~8% by 2060 - **The 2026 Budget** included no change to NZ Super settings - **ACT Party policy** proposes raising NZ Super age to 67 over 20 years — this becomes a central election issue - **NZ First** has positioned itself as the defender of NZ Super at age 65 - **The Retirement Commission's** 2025 Review of Retirement Income Policies is expected to address adequacy and sustainability - **KiwiSaver auto-enrolment** (2018) was a step towards higher coverage, but contribution rates remain low --- ## Business Implications ### For Retirement Village and Aged Care Operators - Low pension replacement rates mean many older NZers face income compression in retirement — affecting ability to pay weekly fees in villages - The high homeownership rate (80% of 65+) supports the ORA model (equity release through village entry) - As future cohorts have lower homeownership rates, the ORA business model faces structural risk ### For Financial Services and KiwiSaver Providers - The gap between NZ's 39% replacement rate and OECD 62% average is a marketing opportunity for KiwiSaver and retirement planning products - Australia's Super Guarantee (11.5%) vs NZ KiwiSaver minimum (3%) provides a natural benchmark for advocacy to increase contribution rates - Reverse mortgage and equity release markets are growing as housing-rich, income-poor older people seek to supplement NZS ### For Investors in NZ Seniors Infrastructure - Low public spending as % GDP suggests headroom for growth in both pension and aged care spending - The fiscal trajectory (4.9% to 8% GDP) implies growing government procurement and subsidy flows - International investors compare NZ's pension system favourably for its simplicity and fiscal sustainability --- ## Campaign Relevance ### Key Data Points for Campaign Use 1. **"NZ Super replaces just 43.8% of average earnings — compared to 63.2% across the OECD"** — adequacy framing (updated 2025 OECD data from 39% in 2023 edition) 2. **"NZ spends ~4.9% of GDP on pensions — well below the OECD average of ~8%"** — but be careful: this can be used to argue either for cuts (it's efficient) or increases (it's insufficient) 3. **"NZ is one of only 2 OECD countries with no earnings-related pension"** — distinctiveness framing 4. **"NZ's pension age (65) is becoming relatively young — most OECD countries are moving to 67"** — age of eligibility debate 5. **🆕 OECD reports NZ seniors poverty rate has DOUBLED since 2023** — from ~12% to ~24% — this undermines claims that NZ Super is adequate ### Messaging Guidance - **For adequacy advocates:** Emphasise the replacement rate gap (39% vs 62%). This is where NZ is most clearly below OECD norms. - **For fiscal sustainability advocates:** Emphasise the spending trajectory (4.9% → 8% GDP). But note that 8% is today's OECD average — this framing cuts both ways. - **For KiwiSaver advocates:** Australia's Super Guarantee (11.5%) vs NZ's KiwiSaver minimum (3%) is the most compelling comparator. - **For aged care advocates:** The pensions data supports the argument that NZS inadequacy flows through to aged care affordability — older people can't afford top-ups. --- ## Source List ### Official OECD Publications 1. OECD (2025), _Pensions at a Glance 2025: OECD and G20 Indicators_ — https://doi.org/10.1787/e40274c1-en (Published 27 November 2025) 2. OECD (2023), _Pensions at a Glance 2023: OECD and G20 Indicators_ — https://www.oecd.org/publications/pensions-at-a-glance-2023-c2a5b62d-en.htm 3. OECD (2024), _OECD Pensions Outlook 2024_ — https://www.oecd.org/publications/oecd-pensions-outlook-2024-c2a5b62d-en.htm 4. OECD (2024), _Pension Markets in Focus 2024_ — https://www.oecd.org/finance/pensionmarketsinfocus.htm 5. OECD (2021), _Pensions at a Glance 2021: Country Note — New Zealand_ — https://www.oecd.org/els/public-pensions/PAG2021-country-profile-New-Zealand.pdf ### NZ Government and Official Sources 5. Treasury NZ (2025), _Long-Term Fiscal Statement_ — https://www.treasury.govt.nz 6. MSD (2025), _Meeting the Future Needs of Older New Zealanders_ (Long-Term Insights Briefing) — https://www.msd.govt.nz 7. MSD (2025), _NZ Retirement Income Policies Background_ — MSD publications 8. NZIER (2026), _Business of Ageing Report_ — Office for Seniors (https://www.officeforseniors.govt.nz) 9. Retirement Commission, _Annual Retirement Income Policy Reviews_ — https://www.retirement.govt.nz 10. Reserve Bank NZ (2025), _The Grey Wave: Exploring the Impact of Ageing on the Financial System_ — https://www.rbnz.govt.nz 11. Stats NZ, _National Population Projections_ — https://www.stats.govt.nz --- _Part of the NZ Seniors Knowledge Base — Statistics & Demographics layer_ _Location: `12_Statistics_and_Demographics/`_ _Last updated: June 2026_