Sole purpose test review urged
The universities aligned Centre for International Finance and Regulation (CIFR) has called for a review of the superannuation sole purpose test to determine whether it is generating an optimal outcome in terms of superannuation savings.
The CIFR has made the call in a submission to Treasury responding to the Tax discussion paper with its chief executive, Professor David Gallagher, pointing to the need look at the design of retirement incomes.
The CIFR submission pointed to the ageing of the Australian population and the importance of having people accumulate sufficient funds during their working lives to self-fund their retirement and lessen reliance on the Government pension.
In doing so, it urged the government to follow through with the reforms and suggestions on retirement incomes policy delivered by the Financial System Inquiry and called out the need to ensure superannuation is as attractive as possible from a tax perspective during the accumulation phase.
Gallagher said that the Government also needed to consider whether the sole purpose test in the context of superannuation savings was optimal.
"Superannuation savings pools should be more significantly oriented around how retirement incomes can be best designed, inclusive of other needs that retirees will have in relation to health and aged care," he said.
Gallagher claimed current policy seemed to be lacking in assisting retirees with what they needed to self-fund their retirement across a spectrum of living and health care needs.
