The Association of Superannuation Funds of Australia (ASFA) has today welcomed the release by the government of a discussion paper and consultation process to enshrine the objectives of the superannuation system in legislation.
“The government’s commitment to defining the objectives of superannuation and enshrining this in legislation will provide an enduring reference point to guide future decision making by all policy makers,” said ASFA CEO, Pauline Vamos.
“Agreeing and adhering to objectives will increase confidence, lead to greater levels of equity, and improve retirement outcomes for all Australians by reducing the politics in policy making.
“The purpose of the system as outlined by the government in today’s discussion paper—to provide income in retirement to substitute or supplement the Age Pension—is a worthy objective, and the good news is that the system is already well on its way to meeting this purpose as well as many of the supporting principles. The current tax concessions supporting the system are sustainable, and superannuation takes substantial pressure off the Age Pension. ASFA estimates that government expenditure on the Age Pension will remain under 3 per cent of the gross domestic product for the foreseeable future.
“ASFA also believes that the superannuation system has an extended purpose: to enable all Australians to be financially confident in retirement, with the measure of success being that the majority of retirees are not reliant on any pension, and that their superannuation balance provides them with enough to have a comfortable standard of living.
“Once the purpose and principles of the system are enshrined, we can have a conversation about the tax concessions that support the system. We must account for the fact that, the superannuation system is still maturing, that broken work patterns still put many members of the community at a disadvantage in retirement and that the system comprises both self-managed and pooled vehicles, which means that a one size fits all approach does not always work,” concluded Ms Vamos.
