Age pension and super need “holistic” view: ASFA
Any changes to the age pension and the superannuation system should be phased in over the long term, the Association of Superannuation Funds of Australia (ASFA) said.
Responding to the National Commission of Audit, ASFA said these two systems are intertwined and there is a need to recognise the interaction between them.
"We encourage the government to take a long-term, holistic view when considering the report's recommendations, and adopt a similar approach," ASFA CEO Pauline Vamos said.
ASFA also said the government should take social and health-related issues into account when changing the qualifying age, as many people in their 60s and 70s can no longer physically do the work they have done in the past.
"This may require governments to offer some relief or carve out for individuals who have spent a lifetime in labour-intensive work, if they are to raise the pension eligibility age to 70," Vamos said.
The age pension eligibility age is currently set to rise to 67 by 2023. The audit recommends increasing the pension age by around half a year every five years.
It also recommended setting the age pension eligibilty age at 77 per cent of life expectancy at 65 from 2033 onwards, which would mean pension eligibility would reach 70 by 2053.
Superannuation preservation age should increase to five years below the pension age, with the preservation age to increase to 62 by 2027, and then increase in proportion with the age pension thereafter, the audit said.
ASFA agrees with this but said the government should take a broader view of the changes.
"In particular we would encourage the government to consider policies that encourage people to take up income stream products in retirement, to help people manage their superannuation savings across their retirement years," Vamos said.
"Such policies could also encourage innovation of post-retirement income stream development, and help deliver a more flexible range of options to suit a variety of retiree's needs."
Recommended for you
Data and technology provider Novigi has acquired Iress’ superannuation consulting and managed services business from Apex Group.
AMP is to launch a digital advice service to provide retirement advice to members of its AMP Super Fund, in partnership with Bravura Solutions.
Unveiling its performance for the calendar year 2024, AMP has noted a “careful” investment in bitcoin futures proved beneficial for its superannuation members.
SuperRatings has shared the median estimated return for balanced superannuation funds for the calendar year 2024, finding the year achieved “strong and consistent positive” returns.
