It’s a mistake which could result in thousands of people having their Kiwi superannuation pensions unfairly docked in a process known as “abatement”, he says.
Brown has taken issue with the NZMSD refusing to budge on its position concerning the Cook Islands National Superannuation Fund (CINSF).
As it stands now, when the measure is introduced, anyone who is a member of the CINSF and is also eligible to collect New Zealand superannuation will have their Kiwi pension deducted to the same value as the Cook Islands “super” pension.
The NZMSD is treating Cook Islands superannuation as though it is a government-funded universal superannuation – and that’s a totally wrong assumption to make, says Brown.
He says the ministry has failed to make the distinction with the CINSF, which receives no government contributions to a fund that’s managed independently of government.
NZMSD has mistakenly classified CINSF the same as a universal pension, like the Cook Islands’ old age pension which is funded by taxpayers.
However, the reality is, the super pension here is nothing like that, says Brown.
“Our super fund is like a compulsory savings account that the members put money into, it’s their money, regardless of the fact that they will collect the universal (old age) pension, that money is nothing to do with government contributions.
“Although the super fund here was initiated by government for all Cook Islanders (at home) to compulsorily be part of, the government has no role to play in this at all.”
The CINSF’s independence was strengthened further when government made a number of legislative changes to the Super Fund Act that removed all government involvement, including the Financial Secretary’s membership, from the board.
The matter was first raised with the CINSF board almost a year ago by a number of local residents.
Although the board has been criticised for “sitting on their hands” and doing little to advance the Cook Islands’ case, Brown says he’s satisfied with what’s been done to date to try and make sure CINSF member’s contributions aren’t unfairly deducted.
It’s now a matter of the government taking over the case as the board is unable to influence NZMSD officials to change their minds, says Brown. He says the government will be petitioning the case with the New Zealand government at the next ministerial talks early in the New Year.
The current Social Development minister in the New Zealand caretaker government is Anne Tolley. This could change after the much-anticipated talks “kingmaker” NZ First leader Winston Peters will have with the National and Labour parties soon.
“Either way, I think we are in a position to be able to explain clearly that the approach by the ministry is totally unfair and totally incorrect,” says Brown.
Brown is also aware that the Cook Islands will have an ally in Winston Peters.
“There’s no doubt he’s going to be a member of the next government so we will talk to him as well.
“We will be taking this case of abatement as far as we can in terms of representation to the New Zealand government, I can’t see it (the abatement) continuing.”