Coonan outlines new super benchmark

The Federal Government has outlined its own formula for growing superannuation savings in the face of calls from business groups and the ACTU for Australia’s major political parties to address a looming retirement savings shortfall.

The Assistant Treasurer, Senator Helen Coonan has dismissed calls for an acceptance of a retirement savings benchmark of 65 per cent of pre-retirement earnings, saying the Government does not wish to saddle Australian workers with such targets.

However she has outlined the Government’s own thinking based on Treasury modelling.

“Treasury analysis indicates that the super guarantee system, combined with the improved aged pension, will produce net replacement rates in excess of 76 per cent for even those on median earnings after 30 years of contributions or 85 per cent after 40 years of contributions,” Senator Coonan says.

She says that to boost retirement savings, the Government prefers incentives such as the Government’s $1.1 billion co-contribution for low income earners.

Senator Coonan says the suggestion made by the coalition of business organisations that the co-contribution policy be extended up the income scale has some merit.

She says any further concessions in the superannuation arena will need to be balanced against other spending priorities such as health, education and defence.

Source: Super Reviewwww.superreview.com.au