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FSC calls for higher pension age

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By Reporter
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3 minute read

The Financial Services Council (FSC) has called for the preservation age to be raised to 65 and for age pension eligibility to be tightened in line with improvements in life expectancy.

FSC chief executive John Brogden said Australia’s retirement system is unsustainable and the age pension and superannuation system must be reformed to “meet the needs and expectations of Australians in retirement”. 

“Lifting the superannuation preservation age to at least 65 would improve public finances − more retirees will be self-funded, and the number of Australians on the age pension will reduce,” said Mr Brogden. 

“Policy settings for Australia’s retirement system must be updated to account for the long-term costs of retirement to the public purse and the practicalities of how long Australians can work and be productive.”

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Mr Brogden said the retirement savings of Australians grow by $200 billion for every year the preservation age is increased. 

In addition to increasing the superannuation access age and limiting eligibility to the age pension, the FSC is also proposing early access arrangements for superannuation for those unable to work to a higher preservation age.  

“We recognise that some older Australians may not be able to work until 65 due to the nature of their work or due to lower life expectancy or poorer health than the wider general public,” said Mr Brogden. 

"For these people there should be a reasonable early access provision to superannuation,” he said. 

Treasurer Joe Hockey raised similar concerns about the pension age in an interview on ABC Insiders on Sunday.

Mr Hockey said Australia needs to have a “mature debate about the sustainability of our pension system and our aged care system”. 

Mr Hockey said it may be necessary to increase the retirement age by a further three years, up to age 70. 

“The fact is that if we're living longer, we need to have a health and welfare system that appropriately deals with the changing demographics of the nation,” said Mr Hockey. 

The Australian Institute of Trustees (AIST) warned that increasing the retirement age may not work for the 40 per cent of Australians who don’t get the chance of choosing when they retire. 

AIST chief executive Tom Garcia said while the sustainability of the pension and superannuation system is vitally important, the high number of older Australians forced out of work early should not be ignored. 

“Timing retirement is a lottery – millions of Australians don’t get to choose when they exit the workforce and our retirement policies need to deal with real people, not just numbers,” said Mr Garcia. 

FSC calls for higher pension age

The Financial Services Council (FSC) has called for the preservation age to be raised to 65 and for age pension eligibility to be tightened in line with improvements in life expectancy.

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