The Financial Services Council (FSC) has urged parliament to support lifting the superannuation guarantee (SG) after a new study showed the nation’s savings shortfall jumped 30 per cent in 2009.
The study, undertaken by Rice Warner Actuaries for the FSC, showed the gap blew out to $897 billion in 2009 from $695 billion in 2008.
“The research shows the longer we delay the move to 12 per cent superannuation, the greater the cost for working Australians,” FSC chief executive John Brogden said.
The retirement savings gap is the difference between what is actually being saved through superannuation and what is needed to sustain a comfortable lifestyle after ceasing work.
“An adequate annual retirement income is defined as 62.5 per cent of a person’s last salary. Our research shows 9 per cent superannuation will fail to provide the population with their expectations of a comfortable retirement,” Brogden said.
“The SG needs to be at least 12 per cent – this, combined with the government’s plan to raise the concessional contribution caps for those nearing retirement and the SG age limit, would provide a 30-year-old on average weekly earnings with an additional $108,000 in their superannuation account on retirement.”
He said boosting compulsory super would also have significant benefits for the Australian economy and the budget.
“Higher savings would reduce Australia’s reliance on international investment, lower the current account deficit and ultimately provide a cheaper and more stable pool of funds for Australians to draw on,” Brogden said.
“Parliament must support the rise to 12 per cent superannuation if Australians are to enjoy a comfortable retirement.”
Earlier in the month, the Association of Superannuation Funds of Australia (ASFA) said the majority of employed Australians believed the SG increase should be implemented sooner rather than later.
In a survey conducted by BrandManagement on behalf of ASFA, 60 per cent of respondents said they wanted a quicker implementation period than that outlined by the federal government.
The government wants to lift the SG gradually from July 2013 until it hits 12 per cent in 2020.
