It must be a Brit affectation: I've never heard of any instance of a previously held rank being used in New Zealand, and a quick scan of the Wellington phone book of three former Chiefs of Air Staff that I am aware of, and one beknighted Chief of Defence Staff shows them all to be plain old initials and name only. I also know locally a former Major General who became had a significant subsequent career after retirement, and only those very closely associated with him know that!
Personally, it would never occur to me to use "Sqn Ldr RNZAF Retd", because it would not only never occur to me, but it would guarantee some pretty strange responses I imagine.
It's good to be 'in', but when you're gone, you're gone!