In a discussion paper, Clarifying the Purpose of the Retirement Incomes System, the CSRI said “ongoing politicking risks resulting in yet another narrowly framed attempt to tackle a much wider problem”.
CSRI founder and executive director Patricia Pascuzzo added: “If eventual change is driven primarily by short-term budgetary and political considerations, we risk missing the opportunity for much more effective long-term reform.”
Ms Pascuzzo said a reform package is needed if the system is to be sustainable. She argued that while lower costs and greater efficiency are important, the purpose of superannuation still needs to be defined.
“After seven years of reviews, we should know what super is for,” she said.
The CSRI said the lack of a clear objective leaves the system open to political pressures.
“The fact is, if we get agreement on income goals, all the other issues, like tax, cost and efficiency and default schemes become easier to resolve,” Ms Pascuzzo said.
In addition to identifying a retirement income objective, the CSRI said the government needs to implement further supporting principles. These include ensuring fairness and equity; assisting individuals manage financial risks; providing certainty with necessary safeguards; and contributing to the sustainability of government expenditure.
“How accumulated superannuation balances are transformed into income streams and how longevity risk is hedged are critical for income security and lessening reliance on the age pension,” said Ms Pascuzzo.
The CSRI was launched on 2 June 2015 in an effort to improve the adequacy and sustainability of the retirement income system.
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