The Association of Superannuation Funds of Australia (ASFA) has welcomed the push from the Government’s reaffirmed commitment to increasing the superannuation guarantee (SG) to 12%, which was announced in the Federal Budget earlier this week, and said it was an important step towards providing adequate retirement savings, particularly for women and younger Australians.
ASFA also supported the package of additional measures aimed at boosting women’s retirement savings and increasing flexibility for retirees to make contributions and access income streams which included:
- Abolishing the $450 a month earnings threshold for the payment of the SG;
- The removal of the work test (for those aged 67 to 74) for superannuation contributions;
- The expansion of the ‘downsizer scheme’ to those aged 60 and over; and
- Increasing the flexibility of the Pension Loans Scheme (PLS).
ASFA’s chief executive officer, Dr Martin Fahy said ASFA has been long advocating for the removal of the $450 threshold, which would be especially beneficial to low income and casual employees, and the majority of whom were women, giving them an entitlement to super that higher paid employees had as a right.
According to the Australian Taxation Office (ATO) data, around 197,000 women were impacted, compared to around 114,000 men.
“Australia’s superannuation system enables Australians to retire with dignity. With the legislated increase of the Superannuation Guarantee to 12%, and a maturing superannuation system, we expect to see a greater proportion of retirees relying less on the Age Pension and more on their retirement savings,” Fahy said.
“Critical social policy issues arise due to women’s lower super balances including poverty and homelessness in retirement. We must continue to work towards broader structural reform to close the gap and improve retirement outcomes for women.”
Additionally, ASFA supported enhancements to the PLS to improve living standards in retirement for those who choose to utilise the scheme and noted increased funding to the Australian Prudential Regulation Authority (APRA) and Super Consumers Australia for superannuation related activities, which according to Fahy, indicated this funding must come with increased accountability.