FSC reiterates call for superannuation guarantee increase
The Financial Services Council (FSC) has again called for the increase in the superannuation guarantee (SG) to 12 per cent, this time presenting research showing that the retirement gap would reduce as a result.
The research, undertaken by Rice Warner Actuaries for the FSC, found Australia would have a retirement savings gap of $836 billion under 12 per cent superannuation - down from $897 billion in 2009 - which would make it the first decline in the savings gap since it was first measured in 2002.
The research also found that in the absence of an increase in compulsory contributions from 9 per cent to 12 per cent, the gap would increase to $1.02 trillion.
The retirement savings gap is the difference between what is actually being saved through superannuation and what is needed to sustain a comfortable lifestyle after ceasing work.
"An adequate annual retirement income is defined as 62.5 per cent of a person's last salary," said FSC chief executive officer John Brogden.
"Our research shows 9 per cent superannuation will fail to provide the population with their expectations of a comfortable retirement."
The average 30-year-old would have an additional $108,000 in their superannuation account as a result of the SG increase.
Furthermore, those already approaching retirement (aged 45 to 54) would have $39,000 added to their superannuation balance, according to Brogden.
"Increasing compulsory superannuation also has significant benefits for the Australian economy and the Budget," he added.
"Higher savings would reduce Australia's reliance on international investment, lower the current account deficit and ultimately provide a cheaper and more stable pool of funds for Australians to draw on."
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