The Retirement Income Review (RIR) should collect information that will lead to the long-term improvement of the retirement sector rather than short-term fixes to current perceived problems, according to the Self-managed Independent Superannuation Funds Association (SISFA).
In its submission to the RIR, SISFA stated it supported the key objective “to establish a fact base of the current retirement system that will improve understanding of its operation and the outcome it is delivering for Australians”, but added the fact base should have a forward-looking focus.
“We submit that the panel should be careful, however, not to present the government with data and facts relating to the current performance and position of the retirement sector as this might misdirect their policy formulation to focus on fixing perceived anomalies with the current situation to the detriment of the long-term sustainability, fairness and adequacy of the system,” it said.
SISFA also stated it believed government policy changes in the past had focused mainly on short-term impacts to the budget and not on the long-term economic and social benefits of an effective retirement income system, and that parts of the RIR discussion paper appeared to be seeking evidence about the current state of the system.
“Again, we urge the panel to ensure its report to government relates to the long-term condition of the retirement system when it has reached a steady state under current settings,” the submission stated.
As part of this approach, SISFA stated an effective retirement incomes strategy would move two-thirds of retirees being dependent on some proportion of the age pension to being reliant on their own savings, and the superannuation system should provide a pension equal to 60 per cent to 70 per cent of a person’s salary while working and this objective should be legislated.
The Association of Superannuation Funds of Australia (ASFA) also called for an alternative view of the retirement sector, stating the issue of retirement income adequacy should be considered in light of the “lived experience” of retirees.
ASFA chief executive Martin Fahy said the three-member RIR panel could establish a credible fact base that would set up the retirement income system for future success, but this could only take place if the facts about the actual experience of retirement were taken into consideration.
“The review must consider the facts about how rising food and energy prices hit retirees’ hip pockets, the facts of provisioning for burgeoning health and aged-care expenses and the facts about how much it costs to live a financially secure, decent life in retirement,” Fahy said.
“That’s the real retirement fact base and that’s what Australians need the panel to assess. Anything less risks ongoing policy instability and uncertainty.”
The RIR has asked for input on what is an adequate retirement income noting there is a lack of general consensus about the adequacy of income levels and methodology of assessing what those levels should be
