The federal budget lacked a grand plan for Australia's retirement income system and the superannuation changes announced were simply tinkering around the edges, Watson Wyatt managing director Andrew Boal has said.
"Retirement and longevity are key issues the government will need to address sooner rather than later," Boal said.
"Unfortunately, what we got on budget night was some partial winding back of the concessional contribution limits that were only introduced a few years ago, and some short-term tinkering with the co-contribution system for low income earners."
While the measure to increase the single age pension was welcomed, he said the government missed out on integrating its social security benefits, particularly the linkages among unemployment benefits, disability pensions and the age pension.
"You clearly don't want distortions in how all the social security benefits are applied. It is also important to make sure that the superannuation system is properly integrated with the social security system," he said.
Halving the concessional contributions will also make it harder for some people to save for retirement.
"It now means that individuals will have much less capacity to top up their retirement savings after their children have completed their education and they have paid off their mortgage," Boal said.
"As a result, you can expect a small increase in the number of people who are unable to fully support themselves in retirement and will fall back on at least a part age pension at some point in their retirement.
"These changes will also force more people on higher incomes to save for their retirement outside the superannuation system."
