Protecting retirement savings

INDUSTRY Super Australia supports the government’s move to legislate an objective of super that enshrines preservation into the wording.

A well-defined and legislated objective of super could be a guiding light for the development of future superannuation policy that will protect and grow the retirement savings for all Australians.

The government’s proposed wording is an excellent starting point for the debate and well-reflects what the community understands as super’s purpose – savings solely for retirement.

Preservation is critical to securing a better standard of living in retirement for more Australians, busting open super early dramatically erodes savings and harms quality of life in retirement.

The key principles of preservation, equity, sustainability, and dignity included in the proposed objective will ensure the system continues to work towards delivering the best possible retirement for all workers.

These important concepts were absent from the previous attempts to legislate an objective of super and spell out that savings are preserved until retirement to deliver an outcome (dignity) in an equitable and sustainable way.

Enshrining these principles in law provides a sound guide to future super policy development.

The government’s proposal also recognises the important continuing role of the aged pension.

A formalised objective of super is long overdue, and we would urge all stakeholders to work constructively towards achieving the goal.

Before compulsory super retirees had little saving and mostly relied just on the aged pension, now the average retiree’s super balance is $360,000. Industry Super Australia modelling forecasts that a 30-year-old on the median wage could have more than $500,000 at retirement.

These are life-changing amounts of money and the ability for future generations to save for their own retirement must be safeguarded.

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