The Actuaries Institute has called for objectives to be set for the whole retirement system, not just superannuation.
The Government has adopted a recommendation of the Financial System Inquiry to set an objective for superannuation. The Actuaries Institute says this should go further, with objectives set for the whole retirement system, including the Age Pension and Superannuation Guarantee.
“We believe that it would be helpful if the Government developed objectives for the whole retirement system, as well as complementary objectives for each pillar or component of the system,” said the Institute submission on the objective of superannuation.
President of the Actuaries Institute, Lindsay Smartt, said that objectives for the retirement system should be flexible to account for different retirement needs, including fiscal sustainability, adequacy, poverty alleviation, equity and fairness.
“While the focus of tax advantaged retirement savings should be on producing an income in retirement rather than the accumulation of wealth for other purposes, it is understood that the needs of individual retirees will vary significantly and a degree of flexibility will therefore need to be maintained in the retirement system,” said the submission.
The Actuaries Institute put forward the following as an appropriate objective for superannuation:
To supplement the Age Pension in order to provide a combined level of income that allows Australians to live a dignified retirement.
“The Institute believes that an equitable and sustainable retirement income system that efficiently delivers on its objectives will not need the ongoing tinkering that has been a feature of the superannuation system for decades,” said the submission.
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