Treasurer would like to establish review of retirement incomes system

Nest egg, superannuaiton, SMSF, retirement
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Treasurer Josh Frydenberg intends to set up a review of the retirement incomes system.

The Treasurer told the Australian Financial Review that he would consult with the Cabinet and Treasury to implement the recommendation of the Productivity Commission for an independent inquiry into the retirement incomes system.

“My intention would be to establish that review,” Frydenberg told the AFR.

“I am positively disposed to a review of the retirement income system as recommended by the Productivity Commission.”

The Coalition had tasked the Productivity Commission with conducting an inquiry into the efficiency and competitiveness of the superannuation system. Despite the final report being released in January 2019, the Commission still lists the inquiry as not having receiving a governmental response.

One of the recommendations of the inquiry was:

The Australian Government should commission an independent public inquiry into the role of compulsory superannuation in the broader retirement incomes system, including the net impact of compulsory super on private and public savings, distributional impacts across the population and over time, interactions between superannuation and other sources of retirement income, the impact of superannuation on public finances, and the economic and distributional impacts of the non-indexed $450 a month contributions threshold. This inquiry should be completed in advance of any increase in the Superannuation Guarantee rate.

Productivity Commission inquiry report Superannuation: Assessing Efficiency and Competitiveness

Such a review may be hampered somewhat by the promise from the Prime Minister, during the election campaign, of no new or higher taxes on superannuation.

Frydenberg also indicated the Government intended to return to superannuation legislation that failed to pass in the last Parliament, particularly around governance and member outcomes. Given the Coalition passed its Improving Accountability and Member Outcomes in Superannuation Measures No. 1 in April 2019, focus would likely turn to the No. 2 Bill. This second Bill would require large super funds to have at least one-third independent directors and an independent Chair. This Bill was last debated in the Senate in December 2017.

Some of this work is likely to fall on the desk of new Assistant Minister for Superannuation, Financial Services and Financial Technology, Jane Hume.

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  1. With all the things that need to be done to advance the Superannuation industry in particular and retirement in general, the government is first going to try and legislate the governance changes , IMO blatant political motives. Sure, look at governance (strange that all the recommendations from previous reviews need to be reviewed again, not so the governance), but I don’t see it as important at this stage, retail funds and banks with their independent directors and chairs came out of Hayne smelling like a cesspit, not so industry funds.

  2. Dear Treasury, please keep myself informed as I could share and provide much insight and strategy formulation with the subject matter under review. Thank you, regards Ben Spina

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