Evidence of decline in super contributions

Aviva Australia has started to see a decline in voluntary super contributions as a result of fears that the Government would increase the access age for superannuation to 67, in line with the recent move in the pension access age to 67.

The Government announced on Friday that it would not increase the access age for super to 67 years to match the move in the pension access age.

Pauline Vamos, chief executive of the Association of Super Funds of Australia, said that everyone acknowledged that talk of raising the access age has caused many people to rethink contributing to their super account this year, and it was pleasing to hear Kevin Rudd confirm that the government would not raise the access age.

Aviva technical marketing manager Martin Breckon said it was important for the Government to provide certainty around the super access age so investors could take advantage of the old super contribution caps before changes to the caps are introduced on July 1.

The Government announced in the Federal Budget that it would reduce the contribution caps to $25,000 for people under 50 years old from the start of the July.

Various industry bodies, including the Australian Institute of Superannuation Trustees, have said raising the superannuation access age would discourage savings and undermine confidence in the super regime.

A recent poll on Money Management's website found that the majority of respondents said lifting the preservation age would distort the retirement incomes regime.