The SMSF Association has called for adequacy to be included in the superannuation objective, labelling the concept fundamental to achieving a secure and dignified retirement.
In its submission to the Senate Economics Legislation Committee, association chief executive Andrea Slattery said: “Adequacy must be included in the objectives of the superannuation system so that our retirement system maintains its goal to provide people with adequate retirement savings to deliver a financially secure and dignified retirement.
“This upholds an aspirational element to super and encourages people to save during their working life to fund a self-sufficient retirement.”
The association’s submission acknowledged that including the concept of adequacy in the super objective raised certain issues, such as the lack of a current accepted definition of “adequate retirement savings”.
But the peak industry body argued those issues could be circumvented by including a subsidiary objective of “providing a secure and dignified retirement” rather than referencing adequacy or a defined level of income to be aimed for in retirement.
It said it believed the subsidiary objectives – which must be linked to the primary objectives – that should be regulated included providing a secure and dignified retirement, managing risks in retirement, and investing in the best interests of members.
They should also include regulation around alleviating fiscal pressures on government from the retirement income system, ensuring the system was sustainable and equitable, maintaining a pool of national savings, and making sure the system was simple, efficient and provided safeguards.
Slattery said it was most important for policymakers to evaluate future super changes against all of the superannuation objectives, including subsidiary objectives, so all facets of the super system were appropriately accounted for.
“This will help deliver greater certainty for super fund members and provide increased transparency on future government policy and its effect on super,” she said, adding the association had been a proponent of enshrining super objectives in law and believed it was a critical step.
“With a retirement system that is still to mature, the importance of setting these objectives down in law correctly is essential.
“This is why we are so adamant that the concept of the super system aiming to deliver a ‘secure and dignified retirement’ must be included in the government’s final objectives for superannuation.”