The Institute of Actuaries of Australia has called on the Government to increase the qualifying age to receive the age pension, as a way of satisfying the retirement savings needs of the ageing population.
Currently, Australians can receive the age pension once they reach 65, but the Institute of Actuaries would like to see the Government lift the qualifying age to 67.
“We are now expected to live 18 years past age 65 and we are probably getting almost another 5 years [life expectancy] every 50 years. So there is just a basic logic in saying should the age pension sit at 65 forever… when the increase in people beyond that age is just expanding,” Institute of Actuaries of Australia convenor, retirement incomes task force, Catherine Vance said.
Other nations, such as the US, UK ,Germany, and Denmark, have already adopted this course of action, easing the official retirement age out to either 67 or 68 over a period of time, according to Vance.
However, regardless of the statistical evidence supporting the move, the Federal Government here is still reluctant to address the issue.
“No politician wants that debated. It is pretty well almost accepted with the Harmer [Pension] Review that it is not even in their jurisdiction to talk about, so it is considered to be a real political hot potato,” Vance said.
In its submission to the Harmer Review, the Institute of Actuaries has recognised a long lead time is required to allow the change to be made.
It is proposing the qualifying age for the age pension be raised from 2025 with half year increments, so that it would be set at 67 by 2032.
