Industry-wide research reconfirms the paramount importance of increasing the Superannuation Guarantee (SG) to 12 percent, says ASFA – The Voice of Super.
AustralianSuper research, released today and undertaken by Rice Warner Actuaries, reiterates the hugely positive impact that the SG increase would have on the retirement incomes of working Australians.
As shown by the following table, only a small minority of retiree households currently have a standard of living in retirement, which equals or betters the Westpac ASFA Retirement Standard at the comfortable level. For lone male and lone female retirees, most currently do not even achieve a retirement standard at the modest level.
Table 1: Retiree households above and below retirement standards, 2010
| Household type |
Below Modest % |
Modest % |
Above Comfortable % |
| Couple only |
40 |
44 |
15 |
| Lone male |
60 |
26 |
14 |
| Lone female |
70 |
25 |
5 |
“As more people benefit from 9 percent contributions over a period of decades there will be a marked increase in the proportion of retiree households that achieve at least a modest standard of living in retirement. However, for there to be a large increase in the proportion of retiree households achieving a comfortable standard of living an increase in the SG to 12 percent is necessary,” says ASFA CEO, Pauline Vamos.
ASFA research indicates that if both members of a couple had incomes of $50,000 a year and each made total contributions of 12 percent per year, they would be able to achieve a ‘comfortable’ lifestyle.
Treasury research has also indicated that for a 30 year old on average wages an increase in the SG to 12 percent would lead to an additional $108,000 in retirement savings.
“The research cannot be denied,” Ms Vamos says.
“The SG increase would also have an extremely positive impact on the Australian economy. By 2020 there would be an additional $10 billion a year in private saving which would be available for investment in the Australian economy, including into infrastructure and business investment supporting Australian jobs and prosperity.
“An increase in private retirement savings will also reduce the prospective burden associated with financing the age pension being paid to an increasingly ageing population.
“Retirees are our consumers of the future. They deserve to have an active and robust retirement lifestyle, live healthily and continue to contribute to the consumer economy.
“Increasing SG will go along way to achieving this outcome.”
The Association of Superannuation Funds of Australia (ASFA) is the peak industry body for the entire superannuation sector. It is the only industry body that represents all types of superannuation funds, service providers and fund members.
For further information, please contact:
Pauline Vamos, ASFA chief executive, 0433 169 342
Michelle Dunner, GM Marketing and Communications, ASFA, 0412 704 016
Sarah O’Grady, ASFA communications co-ordinator, 0410 439 966