Australia's second place ranking in the Melbourne Mercer Global Pension Index confirms the significant role superannuation has played in delivering better retirement incomes and supporting the national economy, the peak body for the super industry said today.
The Association of Superannuation Funds of Australia (ASFA) said the objective and international research demonstrated superannuation was instrumental in Australia being ranked number two out of 16 countries covering 50 per cent of the world population.
"The combination of the means tested Age Pension, compulsory superannuation and voluntary contributions to superannuation provides Australia with a strong and sustainable system," said ASFA chief executive officer, Pauline Vamos.
"In many other countries the costs to governments and employers have already become unsustainable and will continue to increase. In comparison, in Australia we have a system which is both affordable and comprehensive."
The launch of the Pension Index research follows the August release of a comprehensive report by The Allen Consulting Group, Enhancing financial stability and economic growth: the contribution of superannuation, which demonstrated the highly positive impact on both the Australian economy and financial markets, of saving for retirement through superannuation.
Other research recently released by ASFA indicates both growing superannuation balances and expanded coverage of the population.
While overall retirement incomes are increasing the cost to the government, this is being contained by a shift to there being more part-rate Age Pensioners than full-rate Age Pensioners. A majority of those going onto the Age Pension now receive only a part Age Pension.
However, according to Ms Vamos, there are no grounds for complacency.
"Being ranked number two is not good enough. Where the Australian system needs to improve most is in the area of adequacy.
"The proposed increase in the rate of compulsory superannuation from nine to 12 per cent of wages, along with the proposed low-income earners contribution tax rebate, have a crucial role to play in increasing the adequacy of retirement incomes, particularly for low and middle-income earners.
"Gaps in coverage of the compulsory system, including the self-employed, those earning under $450 a month and those on paid parental leave, also need to be addressed."
Media contacts:
Pauline Vamos, 0433 169 342
Megan McDougall, communications and media co-ordinator, (02) 8079 0849
About ASFA - the voice of super
The Association of Superannuation Funds of Australia is the peak policy, research and advocacy body for Australia's superannuation and retirement industry. It is a not-for-profit, non-party political and non-sector aligned association representing fund members, corporate, industry, retail and public-sector funds, as well as service providers to the superannuation sector.