Last week, the government commissioned an independent review into the retirement income system following a recommendation by the Productivity Commission.
According to the Alliance for a Fairer Retirement System, the review will provide an important opportunity to ensure that Australia’s world-class superannuation and retirement income system continues to evolve in a positive direction for all Australians.
The spokesperson for the alliance, SMSF Association chief executive John Maroney, said members identified five key questions that should be addressed during the review or afterwards by the government:
- How can the retirement income system ensure incentives are in place to encourage those who can save for an independent retirement to do so and avoid disincentives?
- What is an adequate level of retirement income commensurate with their pre-retirement standard of living that older Australians should seek to attain?
- What are the defined objectives of superannuation and the age pension and how should these two pillars work together to ensure intergenerational equity and the sustainability of the retirement income system?
- How can retirement income policy settings ensure the maximum degree of certainty for those planning for retirement over decades?
- Where are there gaps or issues that indicate a lack of fairness in terms of either horizontal (between people with similar circumstances) or vertical (between different generations) equity in the existing three-pillar retirement system?
“At present, only 30 per cent of the population over 65 is independent of government support. The remaining 70 per cent is comprised of 42 per cent on the full age pension and 28 per cent on a part age pension,” Mr Maroney said.
“As the superannuation system reaches maturity and balances at retirement increase, reliance on the age pension will reduce.
“Over the same time period, the number of people and the proportion of the population in retirement will increase. The alliance calls on the review to consider the adequacy of super to support retirees into the future.”
Alongside the AFA and the SMSF Association, other organisations in the alliance include the Association of Independent Retirees, the Self-managed Independent Superannuation Funds Association, the Stockbrokers And Financial Advisers Association and WA Self-Funded Retirees.
