The Association of Superannuation Funds of Australia (ASFA) acknowledges the Government’s reaffirmed commitment to increasing the Superannuation Guarantee (SG) to 12 per cent contained in tonight’s Federal Budget as an important step towards providing adequate retirement savings, particularly for women and younger Australians whose superannuation has been severely impacted by COVID-19.
ASFA CEO, Dr Martin Fahy said “Australia’s superannuation system enables Australians to retire with dignity. With the legislated increase of the Superannuation Guarantee to 12 per cent, and a maturing superannuation system, we expect to see a greater proportion of retirees relying less on the Age Pension and more on their retirement savings.”
ASFA supports the package of additional measures to boost women’s retirement savings and increase flexibility for retirees to make contributions and access income streams later
in life, including:
- Abolishing the $450 a month earnings threshold for the payment of the SG
- The removal of the work test (for those aged 67-74) for superannuation contributions
- The expansion of the ‘downsizer scheme’ to those aged 60 and over
- Increasing the flexibility of the Pension Loans Scheme (PLS)
Dr Fahy said that ASFA has been steadfast in advocating for the removal of the $450 threshold, which will be especially beneficial to low income and casual employees, the majority of whom are women, giving them an entitlement to super that higher paid employees have as a right. ATO data suggests around 197,000 women were impacted, compared to around 114,000 men.
“Critical social policy issues arise due to women’s lower super balances including poverty and homelessness in retirement. We must continue to work towards broader structural reform to close the gap and improve retirement outcomes for women.”
ASFA supports enhancements to the PLS to improve living standards in retirement for those who choose to utilise the scheme.
“Broader innovation in reverse mortgage products has the capacity to improve consumer outcomes by increasing competition and lowering costs,” said Dr Fahy.
ASFA notes increased funding to APRA and Super Consumers Australia for superannuation related activities, with Dr Fahy indicating this funding must come with increased accountability.
For further information, please contact:
Jacqui Maddock, 0451 949 300.
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. ASFA’s mission is to continuously improve the superannuation system, so all Australians can enjoy a comfortable and dignified retirement.