The Australian Institute of Superannuation Trustees (AIST) is disappointed with the Federal Government's decision to freeze the superannuation guarantee (SG) rate.
AIST CEO Tom Garcia expressed concern the SG rate would be frozen over four years and would only reach 12 per cent in 2022/23, adding a year to the original time frame. He added this was the second change to the legislated schedule in 12 months.
"This will only make it harder on people to build up their super savings and have a dignified retirement," Garcia said, adding he wants assurance from the Government there will be no more changes to the schedule.
In the federal Budget, the Government said it would freeze the legislated increase in the SG from 1 July 2014, when it is set to rise to 9.5 per cent.
This will freeze at this level until 30 June 2018, and then rise by 0.5 per cent each year until it reaches 12 per cent in 2022/2023.
The Association of Superannuation Funds of Australia (ASFA) is not surprised and said the freeze was "not unexpected".
"While the pause in the increase was not unexpected, as it was previously announced, we are pleased that the pause will apply at 9.5 per cent rather than 9.25 per cent, as previously stated," ASFA said.
But ASFA urged the Government to reconsider the decision and revert to its previous plan of phased increases to the SG.
"People expect to be able to live comfortably and with dignity in retirement, for all of their post-work years. Increasing the SG is a crucial part of ensuring people save enough of their income to help fund the lifestyle they expect in retirement."
