Unfreeze SG and keep default funds to build super: ISA
Industry Super Australia (ISA) has called for the freeze on the Super Guarantee to be lifted and the retention of the Low Income Super Contribution after research found 49 per cent of people aged over 50 and with superannuation will fall back onto the aged pension in retirement.
The research, conducted by UMR Strategic Research for ISA, also found that 34 per cent of people aged 30 to 49 with superannuation, and 26 per cent of people aged 18 to 29 with superannuation, would also need to rely on the pension in retirement.
The UMR research found that collectively 67 per cent of people expect to have to rely on a Government pension at some stage during retirement and 58 per cent did not expect they will be able to live comfortably on their super while 56 per cent of Australians expected to retire with less than $300,000 in superannuation.
ISA chief executive, David Whiteley, said the figures fell away in the younger age groups as they believed superannuation savings would be suitable for a self-sufficient retirement and would come off the back of long term compulsory superannuation.
He said this was "an encouraging vote of confidence in our maturing super system" but the reliance of those aged over 50 on the pension should not be part of any ad-hoc change.
"Both the pension and compulsory superannuation are regarded by the public as essential components of Australia's social infrastructure. Neither should be exposed to piecemeal change, particularly for the sake of short term budget savings."
He stated superannuation should be left to grow the pool of retirement savings and was already paying out twice as much in benefits as the aged pensions and was reducing pension costs by up to $7 billion per year.
He said ISA was also calling for targeted adjustments to be made to spread tax concessions more fairly and retaining the current default fund arrangements for workers who have not chosen their own fund.
"To create greater stability, changes to the retirement system should only be made in line with evidence-based projections that could be included in future Intergenerational Reports at intervals of five years, rather than being tied to electoral and Budget cycles," Whiteley said.
AUTHOR
Jason Spits
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