The Coalition has given the financial services industry until 6 April 2016 to provide feedback about the objective of superannuation.
The discussion paper takes as its starting point the Financial System Inquiry recommendation about the primary objective of super, namely, “To provide income in retirement to substitute or supplement the age pension”.
“The government accepts this recommendation and proposes to enshrine this objective in legislation,” according to the discussion paper.
Treasury has asked respondents to consider four main issues: retirement income versus standard of living in retirement; adequacy; fiscal sustainability; and increasing national savings.
“There are a number of ways in which the objective of the superannuation system could be enshrined in legislation,” said the discussion paper.
“This could be in the preamble to a major piece of superannuation legislation, for example the Superannuation Industry (Supervision) Act 1993, or in a stand-alone act.
“Notwithstanding where the objective is legislated, the purpose of stating the objectives of the superannuation system in legislation is only to guide the policy-making process. It will not affect the interpretation or application of superannuation legislation by the courts,” it said.
Releasing the discussion paper, Assistant Treasurer Kelly O’Dwyer said that enshrining the objective of the superannuation system in legislation will “provide a guide to policy makers, regulators, industry and the community about superannuation’s fundamental purpose”.
“Having an agreed objective for superannuation is critical to securing trust and integrity. It is also a means for increasing confidence in the superannuation system as a whole,” Ms O’Dwyer said.
“We want to have a conversation about the precise wording of the objective – to help frame the broader conversation we need to have about superannuation.”
The major superannuation associations, namely the Financial Services Council, Industry Super Australia and the Association of Superannuation Funds of Australia, were quick to welcome the discussion paper.
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