A focus on superannuation tax concessions and access age is the wrong conversation, the peak body for superannuation said today. Rather the conversations must be on the gaps in the system and its ability to deliver adequate retirement income.
Releasing a new report on equity in superannuation, the Association of Superannuation Funds of Australia (ASFA) said there were several flaws in the current debate:
- Superannuation policy should be focused on how to improve retirement incomes for the majority of the population.
- A high income does not always equate with a high superannuation balance (especially the case with women).
- High-income earners are not necessarily high-income earners all their life.
- Who should be 'in the system', who currently is not?
In its new report Equity in superannuation – The real issues, ASFA refocuses the debate on the vast majority of the population (95 per cent+) who have too little in retirement savings.
"A successful retirement system has broad coverage: This means public policy must be focused on achieving better retirement savings for the bulk of the Australian population," said ASFA chief executive Pauline Vamos.
"This does not mean that the superannuation system should never change but any reforms should be considered against whether they assist in meeting the objective of ensuring that all Australians achieve an adequate retirement income, not on the short-term Budget bottom line.
"The paper identifies five main categories of Australians who tend to be over-represented in the lower income deciles and identifies where the current tax concessions and compulsory super arrangements are working well and where there is room for improvement."
Those identified in the paper as being in most need of assistance include:
- The self-employed
- Individuals on paid parental leave
- Those under the $450 a month threshold for receiving the Superannuation Guarantee (SG)
- Indigenous Australians
- Recently divorced men and women
In relation to increasing the access age for super, Ms Vamos said: "Any discussion around the right access age to super is a complex one as most people do not retire voluntarily.
"Furthermore the majority of Australians retiring today have not had the benefit of a lifetime of compulsory super which was introduced 20 years ago. We know for workers who will have the benefit of 12 per cent over their working life, that this will deliver an adequate retirement income.
"But the real issue is that there are a significant number of Australians, as this report identifies, who are not appropriately covered by the system. This should be our focus."
A copy of Equity in superannuation – The real issues can be downloaded here.
For media inquiries, please contact:
Pauline Vamos, CEO, 0433 169 342
Rebecca Glenn, GM Marketing and Communications, (02) 8079 0825 or 0416 170 439
Megan McDougall, Media and Communications Coordinator, (02) 8079 0849
ASFA is the peak policy, research and advocacy body for Australia's superannuation industry. It is a not-for-profit, sector-neutral, and non-party political national organisation whose aim is to advance effective retirement outcomes for members of funds through research, advocacy and the development of policy and industry best practice.