The Federal Government’s decision to proceed with implementing a key Financial System Inquiry (FSI) recommendation of enshrining the primary objective of superannuation in legislation has been warmly welcomed by the SMSF Association.
The Government has accepted the FSI’s definition of superannuation’s primary objective as “providing income in retirement to substitute or supplement the Age Pension”, and Kelly O’Dwyer, the
Association CEO/Managing Director Andrea Slattery says: “We have been a strong advocate of this important policy initiative, having argued its importance to the FSI and then endorsing the FSI’s recommendation to enshrine the primary objective, with a focus on the provision of retirement income as the quintessential focus of super .
“It’s been our strongly held position that having a universally agreed primary objective is essential to bring stability to superannuation policy and help take it out of the budgetary cycle where it is at the mercy of the government of the day’s fiscal demands.”
She says setting the objective for superannuation in law is vital to ensure that people make long-term savings decisions for their retirement, and this can only be achieved it they have confidence in the system. An enshrined primary objective will go a long way to achieve this end.
“By setting the primary objective, all stakeholders in the superannuation system will have an agreed starting point to develop long-term, sustainable retirement income policy, which should reduce the impetus for ad-hoc policy changes that undermine the system’s stability.”
The SMSF Association looks forward to working with the Government to enshrine suitable objectives that support a dignified and secure retirement for all Australians.
