Posted by David Gledhill on Nov 04, 2022
After a distinguished career in finance: CEO of ACC and AXA, GM Marketing and Strategy at Tower etc. Ralph, MBA Manchester Business School, has founded Lifetime Retirement Income.  He realised that 40% of New Zealanders have no retirement income when they retire than the government superannuation.
 
Ralph believes that every citizen should be able to have a comfortable retirement, but government super alone will not be enough.  After surveying retirement schemes from similar countries, he found there was a lack of retirement policies with variable maturity dates.  He set up Retirement Solutions to fill the gap and soon had 2000 clients, but faced headwinds when the rules initially set by the Reserve Bank were substantially changed after a stock market crash and covid.  He was left without the ability to have a guaranteed scheme but with help and advice from Michael Cullen by extensive visits and explanations was able to retain 87% of the clients.  Now his firm has $700million and 10,000 clients. 
 
He fully supports Kiwi Saver but currently at retirement 300,000 New Zealanders have their homes but less than $200,000 cash and face a much longer life expectancy than the biblical three scare years and ten.  Essentially his scheme allows people to convert their equity into an annuity which will give them more than they could get by doing their own investing.  It also allows clients to determine the maturity date and subsequently vary it.  Ralph emphasised the need for transparency and honesty in all the calculations.
 
Not unexpectedly there were many questions.
Q   How would $100,000 be turned into an annuity? 
A   It would depend on the person's age, gender, health and habits and tax rate relative to tables as determined by an actuary.
 
Q   What rate of return do you expect on your investments and is this guaranteed? 
A   5.5% and no.
 
Q   Can you insist on seeing someone's medical records?
A   We do not do that.  Ironically given the present knowledge of DNA technology a hair of their head (if available, looking at some of the audience)  would give a lot of information.
 
Q   If a person dies before the maturity date what happens to the capital? 
A   The remaining balance goes to the estate.
 
Q    Could I withdraw money for an emergency? 
A    Yes, but it would come from the remaining capital and reduce the regular payments.   
 
Q    Should the present age of 65 for qualifying for national superannuation be raised?
A     NZ can still afford the present age but will have to change it within 20 years. 
 
Q     If it is a joint scheme if one partner dies what happens?                                                                   
A     The surviving partner simply continues to receive the payments.
          
Ralph encouraged people to contact him via his google entry if they want to discuss things further.