The Financial System Inquiry (the Murray Inquiry) has begun to release the submissions received, several of them have raised the issue of increasing the superannuation Preservation Age and aligning it with the Age Pension age.
The Financial Services Council recommends “the superannuation preservation age be increased”, noting the findings of the Grattan Institute that increasing both the Preservation Age and Age Pension age to 70 by 2035 could save 15 billion dollars. It was further noted that aligning the Age Pension age and Preservation Age was supported by the Henry Tax Review and the the Productivity Commission, which reported that:
“In principle, the preservation age should consider life expectancy and the age pension eligibility age as relevant factors. A preservation age linked to life expectancy would provide a financial incentive to stay in work for longer, and as noted earlier for the age pension, provide a shift in expectations about the age to retire.”
CPA Australia believes that “the preservation age and threshold for tax free superannuation benefits should be aligned with the age pension age”.
The Actuaries Institute supports increasing the Preservation Age to “three to five years less than the Age Pension age”.
The Property Council of Australia supports an increase to “62 years … to restore a five year gap between the preservation age and Age Pension eligibility age”.
While not recommending an increase in the Preservation Age, Switzer Financial Group does think it would be an “anomaly” to change the Age Pension age without also changing the Preservation Age.
This page will be updated as more submissions are released.
The submissions to the Financial System Inquiry can be found on the inquiry’s’ website.
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