The Association of Superannuation Funds of Australia (ASFA) has joined the dissenters to the Grattan Institute’s retirement report, released yesterday, slamming it as “an unprecedented attack on the retirement aspirations of ordinary Australians”.
The report recommended postponing the increase of the Superannuation Guarantee to 12 per cent, taxing earnings in retirement at 15 per cent, and changing the Age Pension assets test to include the value of a home above a certain threshold.
It also suggested that the belief of industry groups that Australians would not have enough for retirement was misplaced.
ASFA hit out as these suggestions as intended to dismantle the current superannuation system and replace it with a model that would have two-thirds of the population reliant on the Age Pension.
“This report is about two Australias, where the well-heeled high earners have a fully funded retirement and the rest rely on the state,” ASFA chief executive, Dr Martin Fahy, said.
“In a world where there are broken work patterns, and where women’s balances are 40 per cent less than men, Grattan wants to leave large parts of our society exposed to poverty in retirement. That would be a world where only the few can afford health insurance and where retirement is a dreary replay of the 1950s.”
The Association said that the Grattan analysis set “an extremely low bar for adequacy” in retirement income, when in reality “the great bulk of Australians want and need a retirement lifestyle in line with the ASFA comfortable level”.
It warned that the ratio of workers to retirees would halve from around 4.5 people today to 2.7 in 2055 and that, without superannuation, hitting a comfortable retirement level would be untenable then.