Budget fair for the retirement incomes system
The 2016-2017 Federal Budget has introduced mammoth changes in the superannuation sector, which could help make the economy fairer during ‘financially constrained times', according to the Actuaries Institute (AI).
Approximately 96 per cent of individuals with superannuation will not be adversely affected by changes, which, President Lindsay Smartt, said will revitalise the system.
"Overall the Budget changes improve the system, making it fairer while also increasing revenue to assist the economy," he said.
"The Institute believes these changes will help meet the government's objective of superannuation — to provide income in retirement to substitute or supplement the Age Pension."
Tax exemptions to retirement products and the doubling of tax rates on superannuation contributions for those earning more than $250,000 a year have also been deemed positives by the Institute.
"Together with a reduced concessional contributions cap, this raises an estimated $2.5 billion for the Federal Budget over the forward estimates," Smartt said.
Despite the changes to Transition to Retirement (TTR) policy, the Institute highlighted the adverse effects on average to middle income earners will work against the original intent of TTR and no longer encourage people to work longer.
AUTHOR
Hope William-Smith
Recommended for you
The second tranche of DBFO reforms has received strong support from superannuation funds and insurers, with a new class of advisers aimed to support Australians with their retirement planning.
The financial services technology firm has officially launched its digital advice and education solution for superannuation funds and other industry players.
The ETF provider has flagged a number of developments as it formally enters the superannuation space through a major acquisition.
While all MySuper products successfully passed the latest performance test, trustee-directed products encountered difficulties.
