Super industry experts have reacted positively to the Treasury’s announcement of a retirement income review, the first review of the superannuation industry in 30 years, but say they want the Government to stick to its existing planned reforms.
The Retirement Income Review was announced by the Treasurer Josh Frydenberg and will examine the interaction between the age pension, compulsory super and voluntary savings.
The Productivity Commission had previously urged the Government to undertake the review before increasing the superannuation guarantee (SG) which is due to rise from 9.5% to 12% by 2025.
An initial consultation paper was expected to be released by November, 2019.
AMP said: “A strong retirement system is essential to supporting the wellbeing of Australians now and into the future.
“This is a once-in-a-generation opportunity to improve our current retirement system to make sure it adequately serves everyone’s needs. Now is the time to have the debate on this issue.”
Sally Loane, chief executive of the Financial Services Council (FSC) said the body recommended superannuation laws be simplified and red tape be removed as well as the Government retaining its SG policy.
“Superannuation consumers receive significant benefits from competition and choice, and this will be an important focus of the FSC’s approach to the review,” she said.
“However, this review should not delay important reforms that the Government has already committed to that will significantly improve consumer outcomes in superannuation.”
Alliance for a Fairer Retirement System spokesperson, John Maroney, said: “At present, only 30% of the population over 65 is independent of government support.
“The remaining 70% is comprised of 42% on the full age pension and 28% on a part age pension. As the superannuation system reaches maturity and balances at retirement increase, reliance on the age pension will reduce.
“Over the same time period, the number of people and the proportion of the population, in retirement will increase. The Alliance calls on the review to consider the adequacy of super to support retirees into the future.”
Representing the Australian Institute of Superannuation Trustees (AIST), chief executive Eva Scheerlinck said the review would provide an 'important opportunity' for a thorough examination of Australia's retirement system.
"While Australia's retirement income system is delivering for most of us, many Australians are still retiring in poverty. We hope that the review has a sharp focus on how we can improve retirement outcomes for the vulnerable, low income earners and women, who still retire with less than half the super of men."
"Australia's population is ageing, people are living longer and more people are entering retirement with debt or without the security of a home. The system needs to accommodate these challenges."