Wellbeing Budget 2021

Securing
Our Recovery

Contributions to the New Zealand Superannuation (NZS) Fund

The Government's contributions to the NZS Fund are projected to increase its size to $75.5 billion by 2025. This will help the NZS Fund achieve its primary role of smoothing the cost of superannuation payments in the face of demographic pressures and easing the burden on future generations of taxpayers to meet the increased costs of NZS.

Table 8 sets out the contributions to the NZS Fund over the forecast period and the estimated contribution to the NZS Fund, if contributions were based on the legislated contribution formula. The impact of COVID-19 on GDP means that the contributions prescribed by the legislative formula have decreased in 2021/22. However, due to the importance of investing now to help future generations with the cost of NZS, the Government will continue its planned contribution for 2020/21 and 2021/22. From 2022/23, the Government will return to the contributions legislated in the New Zealand Superannuation and Retirement Income Act 2001. Over the next five years, the Government's contribution to the NZS Fund is forecast to be $9.4 billion in total.

Table 8 - Contributions to the NZS Fund[31]
Year ending 30 June
$billions
2021
Forecast
2022
Forecast
2023
Forecast
2024
Forecast
2025
Forecast
NZS Fund contributions - prescribed by formula 2.1[32] 1.2 1.4 1.7 1.9
NZS Fund contributions - 2021 Budget Update 2.1 2.4 1.4 1.6 1.9

Source: The Treasury

Notes

  • [31]Although contributions in years 2023 - 2025 are based on the legislated contribution for both rows in Table 8, the contribution figures for each of these years will differ slightly. This is because when calculating the NZS Fund contribution for any given year, the legislated formula incorporates the closing balance of the NZS Fund in previous years.
  • [32]As the 2020/21 fiscal year is nearly completed, this value has not been calculated by the NZS Fund.
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