ASFA – the Voice of Super says the timetable for an increase in the Superannuation Guarantee to 12 percent must be adhered to, so Australia’s record on adequacy of retirement incomes is maintained.
“Australia moved from second to fourth in the Melbourne Mercer Global Pension Index, announced yesterday,” said ASFA chief executive Pauline Vamos.
“Adequacy is given the key weighting in this research and comments made by the report’s principal author Dr David Knox at the launch show that increasing SG to 12 percent would return Australia to the number two ranked spot internationally.
“But the key factor for all Australians is that they have enough money to live on in retirement. Dr Knox indicated that a move to 12 percent SG would raise the replacement rate to around 64 percent – under the Westpac-ASFA Retirement Standard, this would give the average Australian above what we classify as a modest standard of living but still a long way below a comfortable level.”
Ms Vamos acknowledged the research showed costs were having a detrimental impact on Australian retirement outcomes. “The industry urgently needs the regulatory roadblocks to efficiency to be removed.
“We urge all parliamentarians – Greens and Independents included – to pass the Government’s program, which includes the increase in SG as well as a number of other initiatives such as multiple use of Tax File Numbers and efficiencies outlined in the Cooper Review’s SuperStream, when the legislation is introduced.
“We have a high participation rate in Australia, unlike many other developed nations in this study, and that contributed significantly to our high score in sustainability in the index.
“But there are too many Australians who are not covered by the compulsory system and we urge the Government to move towards extending SG for self-employed people and to abolish the $450 threshold for SG payments.
“There has been comment that some of the Henry Review recommendations should be implemented for super. I believe these will have the unintended consequence of increasing non-participation. ASFA research shows that raising the SG is the most efficient and cost-effective way of dealing with adequacy.
“Changing the structure will drive people away from super and threaten the sustainability of the system.
“We shouldn’t be creating uncertainty – this is a matter for all sides of politics.”
For further information, please contact:
Pauline Vamos, ASFA Chief Executive, 0433 169 342
Michelle Dunner, ASFA GM Marketing and Communications, 0412 704 016
Sarah O’Grady, ASFA Communications Co-ordinator, 0410 439 966
About ASFA
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.