The government's proposed objective for the superannuation system – to substitute the age pension – is far too low, argues ASFA.
Responding to the government's public consultation on a range of superannuation measures, including the objective of the system, the Association of Superannuation Funds of Australia (ASFA) has argued the bar should be set much higher.
As it stands, the government's proposed objective is "to provide income in retirement to substitute or supplement the age pension".
But according to ASFA interim chief executive Jimi Minto, the objective of superannuation should be to enjoy a comfortable lifestyle in retirement.
Mr Minto also stressed the importance of the wording of the objective of superannuation, given that it will be enshrined in law.
"The objective shapes how much future governments will provide in the form of the age pension together with incentives for people to save for their retirement," Mr Minto said.
"We know that with tight budget positions in the future, the government won’t be able to afford to provide a basic pension to ensure a comfortable and dignified retirement for Australians.
"It isn’t enough now for most people and it’s likely to be even less so in the years ahead, but Australians should aspire to more."
The legislated objective of superannuation should be "to enable as many people as possible to enjoy a comfortable standard of living in retirement", he said.
"By setting a comfortable standard of living as the goal, future governments will look to encourage all Australians, not just the wealthy, to save more for their post-work years," Mr Minto said.
"This is an issue for people to get involved in. It is far too important to be left purely for politicians to decide, with limited public involvement.
"It is un-Australian for today’s politicians to settle on an inadequate objective for super that restricts its purpose to merely substituting or supplementing the age pension."
More to come:
Middle-income earners are forced to spend their retirement nest egg quickly or lose access to more disposable income from the age pension, a...
Labor MP Andrew Leigh has scrutinised the retail superannuation segment, after two funds paid less than half of their early release claims w...
The Financial Services Council has called for the government to tap into the $1.7 trillion in SMSF and retail super funds to put towards bui...