Sir Brian Roche took up the reins at the Public Service Commission in November, aged 69. Photo / Marty Melville
Sir Brian Roche celebrated his 69th birthday as he negotiated his return to full-time employment as head of the core of New Zealand’s central government: the Public Service Commission. By the time he retires from his new job he’ll be 72.
Roche is part of a demographic wave that’s greying offices and job sites. According to the Retirement Commission, 24% of New Zealanders over the age of 65 are still working, a rate double that of the same cohort in Australia (12%) and the UK (10%). And the wave is building.
Stats NZ reports that over-65s — some 225,000 workers — constitute about 7% of New Zealand’s workforce of three million. Twenty years ago, that group represented just 2.5% of the workforce.
There are concerns, especially in light of the upward spiralling inflation of recent years and hefty cost-of-living increases, that some Kiwis are working into older age because superannuation and their retirement savings are too thin to live on. That’s certainly at play.
New survey results released by the Retirement Commission found 36% of participants who were still working past 65, either part-time or full-time, did so because of financial need.
The majority (64%) said they worked “primarily because they wanted to”. In separate qualitative research, the commission found those still working cited motivating factors including: mental stimulation; a sense of purpose; the extra money for “nice to haves”; and a sense of financial security.
But financial insecurity at age 65 isn’t all bad. In large measure, it flows from the greater longevity enjoyed in New Zealand today than in 1898, when 65 was chosen as the age at which an old-age pension could be drawn.
A 65th birthday was extraordinary then, when average life expectancy sat below the age of 50. It’s now 83, and one consequence is an average 18 years of conventional retirement to fund; as life expectancy climbs, the gap widens.
Chris Wright is head of people and culture at independent accountancy and business consulting firm Baker Tilly Staples Rodway.
He said older employees are staying at their desks longer in sectors like professional services, where expertise and depth of experience in areas such as law and accounting are especially valuable.
Wright said longevity is an obvious factor: if they’re in good health, many people want to keep working.
“There is a financial dimension to working, and working longer. But I would really emphasise the social factors. Work is also a very social thing and provides social connection for a lot of people, and for a lot of people it provides a sense of life satisfaction.”
Wright said that age 65 is likely to soon lose its association with retirement altogether. After all, New Zealand has no fixed retirement age and discrimination on the basis of age is illegal, though perhaps not especially unusual.
“Think about it, there’s nothing magic about 65, it’s going to pass and nobody will give a hoot about it, it’ll be just another age. I think that is going to happen very soon.”
Currently, Kiwis can universally start receiving superannuation at age 65, but these payments are not affected by ongoing employment (only that earnings plus super may be taxed at a higher rate).
There’s broad disagreement over how to make the cost of superannuation sustainable in light of a generally ageing population — the $23 billion government contribution this year is about 17% of total tax revenue, and in 10 years, absent changes like higher taxes or means testing, it’ll be over 20% — but there is one area of general concord: superannuation alone does not allow for a comfortable retirement.
Before tax, it pays single people a little over $1000 a fortnight while couples, where both qualify, receive $1600.
Supplementing this with a wage or business earnings (and seeking to delay drawing on savings) is clearly on the rise.
Ian Fraser, 72, started the jobs website Seniors@work in 2019, after his own struggle to return to work.
His site targets those over 50 and, as a general observation, he said site users in their 50s and early 60s tend to look for full-time work, and beyond that it starts to shift. Those looking for work in their mid-60s or later typically look for part-time or project-based work, or fixed-term contracts.
Companies often value seniors in face-to-face roles, solving problems for unhappy customers, for example, Fraser said. The Warehouse, NZ Safety Blackwoods and Harvey Norman are all users of his site.
Fraser has also noticed that smaller companies, where the owner and staff are all in later life, sometimes want to target their hiring to an older demographic.
Physical and heavy labour is obviously unsuited to older workers, but Fraser said his site did quite a lot of matching this group with seasonal horticultural and vineyard jobs during the pandemic, when there were fewer foreign workers in New Zealand. However, that has fallen away over the last few years because “those employers don’t need to be as flexible now as they did when workers were scarce”.
Anecdotally, Fraser said, he hears fewer stories now from people who feel they’ve been overlooked because of their age than he did five years ago.
“It used to be pretty common, people who’d come away from an interview with a young recruiter, for example, who felt that they were being discounted or sidelined because they were older. I don’t hear that as much these days.”
But there is a general feeling that some employers, and perhaps especially young recruiters, can overlook the benefits of age.
Liza Viz, chief executive at Beyond Recruitment, told the Herald some employers need to be “reminded” that older staff bring benefits including depth of experience and expertise, loyalty and a strong work ethic.
She also noted that accommodating these workers has happened more smoothly since the extraordinary shake-up in work arrangements that happened through the pandemic.
“It’s important to note that since Covid, employers have introduced different arrangements, hybrid working, part-time hours or flexible arrangements for all, so accommodating an older demographic is no different to accommodating any worker regardless of group of age per se.”
Wright echoed the view, saying many flexible policies were conceived for younger demographics but frequently suit older people well. A case in point is his firm’s policy that allows staff to work while overseas (for non work-related reasons).
“We started this as a way to keep the younger ones who might be thinking of going off on an OE. The idea is that you can take, for example, three weeks’ annual leave and add to that three weeks’ of work based overseas, from places where you’re able to do that, and that would be a way of getting some experience of being away. That’s something that we began for younger staff, but actually it would work well for the demographic in their 50s and 60s with children living overseas.”
Last year inflation was the big worry but it has now fallen down the list.