Following release of the Intergenerational Report 2015 the Australian Institute of Superannuation Trustees (AIST) has called for the Government to review the proposal to lift the Age Pension eligibility age to 70 by 2035.
The AIST says the Intergenerational Report (IGR) provides no evidence supporting an increase to the age pension age, instead projecting that “future pension costs in our ageing population are manageable in existing policy settings.”
AIST CEO Tom Garcia said the already scheduled increase to 67 was sufficient to reduce long-term pressure on the budget from an aging population.
“Raising the retirement age is a very blunt tool that will hurt a lot of involuntary retirees who – for all sorts of legitimate reasons – cannot work longer,” he said.
“The IGR shows that there is no need to panic. Increasingly productivity, higher labour force participation, a maturing superannuation system and a sustainable Age Pension system will all contribute to building a stronger Australia.”
Under the Intergenerational Report 2015 expenditure on the age and service pensions is projected to rise from 2.9% to 3.6% in 2055, which Mr Garcia points out “is much lower than almost every other OECD economy.”
He went on to say the super and Age Pension systems would be working in tandem for decades, and advocates bringing forward the scheduled increase to the superannuation guarantee rate to 12%. This rate was pushed back as part of the Minerals Resource Rent Tax repeal.
“The longer we wait for the Super Guarantee to rise from 9.5% to 12%, the longer we wait for super to do more of the heavy lifting in providing retirement incomes,” said Mr Garcia.
“Investing in super today, is an investment in future budget savings because there will be less retirees requiring the Age Pension.”
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