Australia’s superannuation system has experienced a slight drop in global rankings, according to the latest Mercer CFA Institute Global Pension Index (MCGPI) report. Australia now ranks 6th globally, down from 5th place in the previous year, with an overall index score of 76.7. The MCGPI evaluates pension systems based on three key factors: adequacy, sustainability, and integrity. Despite Australia maintaining a high score in integrity, concerns around adequacy and sustainability have affected the overall ranking.
ASFA CEO, Mary Delahunty commented on the results, stating, “Australia’s superannuation system remains robust and an envy of the world, but the latest ranking underscores the need for continuous refinement. We must continue to address gaps in retirement income adequacy, particularly in the face of increasing life expectancies and economic pressures.”
The report suggests that introducing a government superannuation contribution for primary carers of young children could help improve Australia’s adequacy score.
“Valuing caring roles is something that everyone in this country should absolutely turn their attention to. ASFA is committed to working alongside policymakers to ensure the system adapts to these challenges, securing retirement outcomes for future generations,” Delahunty affirmed.
ASFA noted that recent legislation providing superannuation payments on government-provided paid parental leave represented good progress on that measure. ASFA has also consistently advocated for an expansion of the Low Income Superannuation Tax Offset, which would improve the adequacy of superannuation for many low income and part-time workers.
While the report suggests a compulsory income stream for retirees, ASFA highlights the importance of member choice and the need for deeper consultation. “While such a move might positively impact Australia’s ranking in the index, it’s essential that we thoroughly evaluate the potential implications for Australian retirees. Flexibility in the system remains key, and we believe members should be empowered to make the right decisions for their circumstances, with the support and advice of their super funds,” said Delahunty.
“As always, we must ensure that any proposed changes to the system prioritise the best outcomes for all Australians to achieve a comfortable and dignified retirement,” Delahunty concluded.
For further information, please contact ASFA Media team: 0451 949 300
About ASFA
ASFA, the voice of super, 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. ASFA’s mission is to continuously improve the superannuation system, so all Australians can enjoy a comfortable and dignified retirement.
