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Superannuation bodies have welcomed the government’s draft objective, saying it will provide equity in the system and help protect preservation.
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Draft objective to ‘protect super from interference’
21 February 2023
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Superannuation bodies say Treasury’s draft objective will help protect super from interference and ensure stability as they welcomed the consultation process prior to legislation.
The proposed objective, released yesterday, aims “to preserve savings to deliver income for a dignified retirement, alongside government support, in an equitable and sustainable way”.
Australian Institute of Superannuation Trustees (AIST) chief executive Eva Scheerlinck said the proposed definition and consultation were important steps towards legislating the objective for Australia’s $3.3 trillion retirement savings system.
“We believe the legislating of an objective is important and long overdue, and the proposed objective released today for consultation is promising,” Ms Scheerlinck said.
“The definition recognises the centrality of preservation of superannuation benefits until retirement, equity in the system and the important role superannuation plays in providing a dignified retirement.”
Ms Scheerlinck said these were characteristics AIST was seeking to enshrine so the system looked after the needs of all Australians, including women, lower paid workers and vulnerable people.
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“We’ve seen the damage that the COVID-19 early release scheme did to the retirement savings of thousands of fund members, many of whom are people who could least afford to see their retirement savings depleted.”
“Superannuation is for retirement, not a piggy-bank to be opened when convenient, so legislating an objective will help to protect super from interference in future.”
AIST planned to consult its members about the paper and the proposed objective.
The Association of Superannuation Funds of Australia (ASFA) also endorsed the government’s proposed objective, describing it “as an inflection point in the evolution of Australia’s retirement income system”.
“The proposed objective places preservation, retirement income, equity, sustainability and a dignified retirement at the heart of superannuation policy while recognising the ongoing role of the age pension,” said ASFA chief executive Dr Martin Fahy.
“As the largest defined contribution pension system in the world, this objective offers a retirement aspiration which is fit for purpose, and worthy of our commitment to a future where all Australians can face into retirement with confidence.”
Dr Fahy said the proposed objective can “underpin much needed policy stability and help anchor future policy debates in ensuring our age pension remains affordable, that superannuation savings are preserved to retirement, and that the system delivers in an equitable manner for women and low-income earners”.
“ASFA has been strongly committed to the formalisation of an objective for superannuation that holds stakeholders across the system accountable for the long-term retirement outcomes of Australians and which encourages stability in the policy settings.”
SMSF Association chief executive Peter Burgess was pleased to see the concept of a “dignified retirement” included in the proposed objective, which was a long held goal of the body.
“The government’s decision to open up the proposed definition of the objective of superannuation for public consultation is a positive step in finally achieving this critical recommendation,” he said.
“We look forward to working with the government to ensure the legislated objective achieves these important goals.”
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