Whichever party wins the forthcoming Federal Election should move to lifetime superannuation contribution caps, enabling people to seriously top up their super in the latter years of their working lives.
That is the bottom line of a roundtable conducted by Money Management’s sister publication Super Review and sponsored by Metlife at which all the participants supported the concept of lifetime caps as a step beyond a Coalition Government simply lifting concessional contribution caps back towards their pre-2007 levels.
The concept gained the support of both the Association of Superannuation Funds of Australia chief executive, Pauline Vamos, and the chief executive of the Financial Services Council, John Brogden, with Vamos claiming such a move was capable of being implemented within the current capabilities of the Australian Taxation Office.
“A lifetime cap is the first step and then some annual limits, particularly at the older wages, so that you do get that leveling out of the tax concessions,” she said. “You can do all of that now with the reporting and the centralisation of records under the ATO.”
Energy Industry Super Scheme chief executive Alex Hutchison said that the current $25,000 a year concessional superannuation cap was simply not enough to allow older workers to play catch-up.
“Because in a fund like ours the truth is people can’t really start making extra contributions till they’re in their mid 40s, when their mortgage is under control and the kids are leaving school, all those things that everybody’s heard of ad infinitum and you’ve got to catch up and you can’t catch up at $25,000 a year,” he said.
Deloitte partner Russell Mason said that while there had been much discussion around a future Government legislating to encourage the taking of income streams, people first needed to be allowed to accumulate enough superannuation to be able to generate those streams.
“I think the majority of Australians would love to have an income stream dilemma and the problem of what to do,” Mason said. “You’ve firstly got to have accumulated enough money to have the dilemma and the vast majority of Australians still haven’t managed to do that.”
