The Government appears to be leaning towards a policy to allow New Zealanders to choose when they retire, giving the option of gambling on a smaller pension at 60 or a super-sized pot for waiting until 70.

Treasury has released a discussion document on Flexible Superannuation, a flagship policy of UnitedFuture leader Peter Dunne.

Up for debate is an option to start drawing a pension as much as five years earlier than people can currently, but at a substantially lower weekly rate, which would remain at the lower level until death.

Alternatively, workers could delay drawing the pension until as late as 70, getting a much larger packet.

Exactly how much more or less than the current rate of NZ Super they would get has not been calculated.

Examples given yesterday suggested a 6 per cent discount for every year the pension was drawn early, or 10 per cent extra for every year it was delayed.

The Treasury discussion document warned the final figures could be "much different" and would depend on detailed analysis which has not taken place.

The treatment of SuperGold cards would be unchanged, no matter when the pension was drawn.

Mr Dunne said there were "obvious advantages" for some groups, such as those who were "physically exhausted" by age 60 because of work, Maori and Pasifika people because of generally shorter life expectancy, and those who were working beyond 65.

"What this does is put the choice in their hands, as to when they chose to retire."

He did not know what the scheme would cost if people were able to generally estimate their individual life expectancy, but did not believe the system could be gamed.

"The grim reaper will still strike when the grim reaper strikes," Mr Dunne said.

"You can't screw the scrum by saying, ‘we'll get in here earlier and make hay while the sun shines'."

The consultation was launched as part of National's support agreement with Mr Dunne.

Prime Minister John Key said the idea had merit.

He said that he would not contradict his firm promise, made in 2008, to never raise the age of eligibility for NZ Super because the scheme would be voluntary.

If National ultimately decided to support the plan, he did not believe he would need to take it to the election for a fresh mandate, Mr Key said.

It would be a "challenge" to make the scheme both cost neutral, while also being attractive enough to create enough interest to make it worthwhile.

Labour finance spokesman David Parker said the party would consider the policy.

But he warned it had "fishhooks".

Because many of those with shorter life expectancies would take the money early, Treasury would have to pay a much lower rate at age 60 if the scheme was not to add extra cost.

But Mr Parker warned that some workers would be tempted to take the money early because of difficult financial circumstances - even if that meant they ended up with less money for much longer.

"Some people, because of their economic circumstances might be pressured to take their pension early, despite the fact that doing so could mean they live in poverty as they age."