Consider all angles before changing pension age: ASFA
Policy makers should consider the consequences before raising the qualifying age for the age pension to 70, the Association of Superannuation Funds of Australia (ASFA) has warned.
It comes as the Productivity Commission made the suggestion in view of Australia's burgeoning ageing population.
Australia's population is set to hit 38 million by 2060, with the 75 years-plus component expected to rise by four million. This is an increase from about 6.4 per cent to 14.4 per cent of the population.
"In 2012, there was roughly one person aged 100 years old or more to every 100 babies. By 2060, it is projected there will be around 25 such centenarians," the productivity commission said.
ASFA chief executive officer Pauline Vamos said while she understood the economic pressures of an increasing ageing population, social and health-related factors must be considered before making any changes.
"Many people reaching their late 60s and early 70s are either unable to work at all, or can no longer perform the roles they have been working in, due to physical or mental health-related concerns," she said.
"While retaining these workers is good in theory, the reality is a lack of jobs for older workers would most likely see many individuals in this age group forced to apply for the Newstart allowance in order to survive."
She also said the age increase could push people in their late 60s onto the disability pension and policy makers should consider the cost of this.
ASFA suggested measures that could be applied to reduce individuals' reliance on the age pensions include providing training and support for older workers and encouraging employers to hire older workers.
It also suggested continuing to provide tax concessions for superannuation contributions, and being flexible on contribution caps to allow people, especially women, to catch up in their retirement savings when they can.
"Such policies have the potential to boost retirement savings, which will help governments now and in the future when it comes to ensuring all Australians have an adequate income to live a comfortable retirement," Vamos said.
Recommended for you
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.
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.
