The Australian Institute of Superannuation Trustees (AIST) has welcomed today’s release of the Retirement Income Review, while urging the government to stick to the scheduled increase of the superannuation guarantee.
AIST CEO Eva Scheerlinck welcomed the review’s finding that compulsory superannuation is effective and sustainable and that without it many workers would not have sufficient savings in retirement.
“The Government should not use the report to renege on the legislated increase in the SG to 12% by 2025, it is critical for delivering retirement security for low and middle income earners,” Ms Scheerlinck said.
“The conclusion that compulsory superannuation is a critical feature of Australia’s retirement system is in line with what working Australians know to be true,” Ms Scheerlinck said. “Australia’s population is ageing, people are living longer and more people are entering retirement with debt or without the security of a home. Research shows a clear community expectation for an adequate age pension and an equitable, universal, compulsory super system that will deliver all Australians a decent, dignified life, free of financial stress in retirement.”
“Low and many middle income earners, don’t have savings or home equity to fall back on if their super isn’t adequate. This is particularly true for women, and those who have had to drain their super accounts to get through the Covid lockdown. The increase to 12% super is critical for them to have financial security in retirement.”
“Inequity in the system should be dealt with directly, through addressing the distribution of tax concessions, rather than leaving women with a shortfall by delaying or freezing the super increase, causing even more women to retire in poverty. We should be trying to lift those falling through the cracks to the adequate levels enjoyed by others in the system,” Ms Scheerlinck said.
“The report finding that freezing the SG rate at 9.5% would allow for higher living standards in working life doesn’t hold true for many Australians. Any trade-off between wages and super is not automatic and is dependent on economic conditions and bargaining power. For Australians on legislated minimum wages and conditions the SG increase is the only real increase they are likely to see.”