There was an audible gasp in Parliament on Tuesday evening when Treasurer Wayne Swan announced to the chamber that the government would progressively increase the qualifying age for the age pension to 67 by 2023.
While Swan said the change was timely because it reflected changes in life expectancy and international trends, some in the superannuation industry are not happy.
Australian Institute of Superannuation Trustees chief executive Fiona Reynolds is concerned about the move.
"There are many in our community who may not be physically able to continue to work. Indeed, a significant number of retirees report that ill-health is the main reason they leave the workforce," Reynolds said.
The measure was met with surprise by Association of Superannuation Funds of Australia (ASFA) chief executive Pauline Vamos.
"This was certainly part of the Henry Review. However, this was not supported by ASFA - our view was that 65 should be the magic number," Vamos said.
However, Mercer retirement, risk and finance partner and vocal supporter of the age increase David Knox said there was no such thing as a magic number for retirement.
"What really needs to happen is we need to change the mindset of the community. We want to say that there is nothing magic about 65; it's just an age and has been around for a long time," Knox said.
He said the pension age had not changed in 100 years and it was due for a revamp.
"We commend the government and believe that it is moving in the right direction by being consistent with other countries. We don't think that 67 should stay around for another 100 years either. It is an age that needs to be modified as demographics change," he said.
Russell Investments director of actuarial and benefits consulting Matthew Burgess agrees.
"The increase in age pension age, although unlikely to be popular, reflects the reality that Australians are living longer and the age pension is a substantial and growing expenditure," Burgess said.
"The long phase-in period allows ample time for individuals to adjust their retirement plans if necessary."
Following Swan's announcement, opposition financial services, superannuation and corporate law spokesman Chris Pearce cast a gloomy picture for the future of Australians, saying they would now be working longer, retiring later and living on less.
However, Knox said the move to increase the qualifying age for the pension would ultimately be positive for the super industry.
"If we're encouraging people to work a little bit longer, they won't access their super as early. The money can then stay in the fund a bit longer and can earn extra investment income, which is good for retirement benefits," he said.
"In the long-term, the benefits will be that people won't focus on 65 in their planning. They will focus on an age that is appropriate for them."
