The number of retirees to draw a full Age Pension will halve by 2060 but the gender gap will persist, according to the Intergenerational Report released by the Government on Monday.
Commenting on the findings, the Australian Institute of Superannuation Trustees (AIST) said the report was a “ringing endorsement” of the maturing superannuation system and highlighted that the retirement income system was economic sustainable.
The report projected that with 12% superannuation guarantee by 2025, the median super balance at retirement would increase from $125,000 in 2020/21 to $460,000 in 2060/61.
AIST chief executive, Eva Scheerlinck, said: “As younger generations retire with greater superannuation savings, the total proportion of older Australians receiving the Age Pension will continue to decline. It is a very significant to see that the number retirees drawing a full-age pension is expected to halve by 2060”.
Similarly, the Association of Superannuation Funds of Australia (ASFA) chief executive, Dr Martin Fahy, said: "With more Australian retirees having higher super balances, the proportion of retirees reliant on the Age Pension will decline and ASFA expects half of all Australians to be self-funded in their retirement by 2050.
"Our strong superannuation system will allow Australia to lower the burden of the Age Pension from the current 2.7% of GDP to 2.1% in 2060-61 making it the lowest among our OECD peers.”
Industry Super Australia (ISA) deputy chief executive, Matt Linden, added: “Lifting the super rate to 12% will decrease the reliance on the aged pension, provide private savings to fund future aged care costs and allow the country to deal with lower-than-expected population growth”.
However, the report noted that women were expected to retire with less than men unless urgent action was taken. It said Treasury expected the gap to narrow if more women made voluntary contributions.
“The IGR shows existing policy settings will not materially close the gender super gap so additional policies are needed including paying super on parental leave and better targeting tax concessions,” Linden said.
Scheerlinck said there remained a need for policy changes to speed up the closing of the gender gap.
“Paying superannuation on paid parental leave is an obvious next step,” she said.