In its submission to Senate Economics Committee’s inquiry into Improving consumer experiences, choice & outcomes in Australia’s retirement system, the Association of Superannuation Funds of Australia (ASFA) has welcomed the Committee’s focus on member outcomes and highlighted that it is the design of the system, based on the principles of preservation and universality, which is key to delivering those outcomes.
“The superannuation eco-system, as a whole, is continuously seeking to achieve the same aims as the Committee, while changes to improve member experiences are welcome, along with improvements to ensure more equity and adequacy, any alteration to the principles of preservation and universality would result in worse retirement outcomes for all Australians,” said ASFA CEO, Mary Delahunty.
Ensuring almost all workers have a right to be paid superannuation, and that accumulated money is kept for use in retirement, has seen the average superannuation balance triple for men and quadruple for women between 2005-06 to 2020-21. The percentage of Australians with superannuation has also increased over that period.
“Superannuation coverage needs to increase, not decrease.
“We know that the incidence of insecure and gig-economy work, along with broken work patterns, is increasing, thereby making a universal system with its associated benefits of coverage, scale and pooling, even more imperative to the achievement of a dignified retirement for more Australians,” Ms Delahuty added.
The submission provides a detailed background on the design of the retirement system in Australia and calls for the objective of superannuation to be legislated, ensuring the preservation of benefits until retirement.
“Australia’s superannuation system is world leading, thanks to its relative low-cost, broad choice and good returns to members.
“The benefits of the system flow to all Australians by reducing the cost to tax payers of supporting our increasingly aging population via the Age Pension.”
ASFA has made recommendations to address inequities and inefficiencies in the superannuation system and to promote innovation in retirement income streams.
“Dignity in retirement is the guiding light of our superannuation system. We welcome a policy focus that galvanises member outcomes through the consideration of adequacy and equity in the system,” concluded Ms Delahunty.
