The Retirement Income Review is likely to lead to more changes to the superannuation system, but these changes should improve the overall strength of the system in the long term, the head of an industry body has predicted.
“In the short term I think [the Retirement Income Review] is likely to lead to more change, but in the longer term hopefully that’s completing the process of putting the architecture in place, particularly for the retirement phase, which is [currently] incomplete,” SMSF Association John Maroney said at a recent industry function in Sydney.
“I think it’s necessary even if it means we have more instability for some time, but then we get to have more chance of stability because then we’ll have mechanisms that are going to work [better] and at the moment that work hasn’t finished.”
According to Maroney, the issues being raised as part of the Retirement Income Review, which includes superannuation, the age pension and savings, are not new and should perhaps have been addressed before now.
“For 30 years we’ve been dealing with a lot of these questions but we still haven’t got, as a community, answers to [questions such as] what’s the objective of superannuation, how do you help people who are dealing with a low interest rate environment, how to deal with longevity risk, investment volatility risk [and] sequencing risk,” he said.
“So there are a lot of questions that remain unanswered and we hope the work of the review and [associated] objections, reviews and options, and even if they don’t provide recommendations, we hope they’ll actually give a great impetus to dealing with these [issues] and steering the way ahead.”
The SMSF Association used its Retirement Income Review submission to call for the system to become more cohesive and for the process to recognise the significant role SMSFs play in the lives of Australians and their retirement savings goals.
