Stop tinkering with Autralia’s super
A major global human resources company believes Australia should stop “tinkering” with its $1.2 trillion superannuation market and carry out major changes including new rises in the age pension qualifying age to regain confidence in the system.
The Mercer company has warned that short-term, incremental changes made in isolation from one another could undermine future national superannuation savings. The company states, “a major risk is that moving the goalposts too many times will simply diminish people’s confidence and ability to participate in the game at all”.
At present, superannuation is the subject of two major inquiries by Treasury Secretary, Ken Henry’s tax review and Jeremy Cooper’s Super System review, as well as numerous smaller investigations into options dealing with self-managed super funds, merging funds, and lost super accounts.
The Mercer consultancy itself believes the government should encourage people to set aside a share of their superannuation benefits – initially between 25 and 40% of accrued benefits above the tax-free threshold – for annuities.
It also wants super funds to pool the “longevity” risks of their clients post-retirement lifespans, have greater access to long-term Government bonds, and face fewer laws blocking new products.
