Super objective needs adequacy concept
The concept of adequacy needs to be included in the superannuation objective to ensure people have a secure and dignified retirement, the SMSF Association believes.
In a submission to the Senate Economics Legislation Committee, the association's chief executive, Andrea Slattery, said including adequacy would uphold an aspirational element to super and encouraged people to save during their working life to fund a self-sufficient retirement.
However, the association noted that including the concept of adequacy in the objective raised certain issues, particularly that there was no current accepted definition of adequate retirement savings.
It said these issues could be circumvented by including a subsidiary objective of "providing a secure and dignified retirement" rather than referencing adequacy or a defined level of income to be aimed for in retirement.
Slattery said it was most important for policymakers to evaluate future super changes against all of the super objectives, including subsidiary objectives, so that all facets of the system were appropriately accounted for. "This will help deliver greater certainty for superannuation fund members and provide increased transparency on future government policy and its effect on superannuation," she said.
"With a retirement system that is still to mature, the importance of setting these objectives down in law correctly is essential."
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