Super objectives must be adequacy-based: MLC

NAB-owned wealth management provider, MLC, called for a re-doubling of efforts in establishing measurable and adequacy-based objectives for the superannuation system, arguing the constant political tinkering had increased uncertainty around retirement.

MLC's whitepaper, ‘Australia Today', found 66 per cent of over 2,000 people surveyed were unprepared for retirement, while only 15 per cent were confident about their retirement future.

Executive general manager, superannuation and investment platforms, Paul Carter, said reducing confusion around the super system would aid in lifting the burden off the Age Pension.

"Superannuation has been the subject of political whims for too long. The end result has been constant tinkering, or significant unanticipated change, which has left Australians feeling uncertain about their retirement," he said.

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While he welcomed the political parties' commitment to enshrine super objectives, he warned "those objectives must be clear, measurable and robust to ensure they target an adequate replacement income in retirement to mitigate generational inequity and gaps in living standards as well as costly and destabilising interventions into the future".

MLC's research also found 74 per cent of women felt unprepared for retirement, compared to 57 per cent of men, which corresponded with the fact that they retired with 40 per cent less super than men. Of those women retired, 57 per cent of them feared outliving their retirement savings, compared to 32 per cent of men.

Young people aged 25 to 29 were also more likely to feel unprepared (79 per cent).

More than half of those with investment properties or shares felt more prepared for retirement, compared to only 15 per cent of those with none of these assets.

On the upside, 29 per cent made additional contributions to their super in the last 12 months, while 27 per cent consolidated their super. Consolidation was more common amongst younger people (35 per cent amongst those aged 25 to 29).