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Retirement, Superannuation

Industry bodies highlight specific report areas

The financial services industry bodies have highlighted specific areas of the Retirement Incomes Review for specific scrutiny but have all in the main welcomed the report.

The financial services industry bodies have all welcomed the government’s Retirement Incomes Review with most highlighting specific aspects for particular commentary.

The SMSF Association was pleased the report continued the call for the objective of superannuation to be defined.

“The Review issued a fresh call for superannuation to have a clear objective to guide policy, improve understanding and provide a framework for assessing its performance. Our submission also made having an Objective a priority, so it is pleasing the Review has endorsed this position,” SMSF Association chief executive John Maroney said.

He added the finding that the current retirement income system is effective, sound and its costs sustainable in general was reassuring for SMSFs and the wider superannuation industry.

However, he hoped the report will lead to a simplification of the SMSF sector on the back of the recognition by government that the retirement income system is at the moment complex.

The Financial Planning Association (FPA) also homed in on the finding about the complex nature of the current framework and supported the proposed measures to fix this characteristic.

“The FPA supports the Review’s recommendation that the Government address the barriers to seeking and accessing financial advice, including the cost of advice,” it said.

The Financial Services Council (FSC) drew attention to the more efficient use of retirement savings and the implications the report had for the super guarantee (SG) levy and the potential for it to increase.

“The FSC acknowledges the review’s emphasis on using retirement savings more efficiently, and we support implementing the Retirement Income Covenant for trustees. In the context of our successful system, however, we urge the government to also consider carefully whether any changes to the schedule increase in the superannuation guarantee to 12 per cent would be in Australians’ best interests,” FSC chief executive Sally Loane said.

The Australian Superannuation Funds Association (ASFA) welcomed the report but expressed its disappointment with the comments the review made regarding the SG.

“ASFA research found that 75 per cent of Australians support the legislated increase to 12 per cent SG which is a cost to business of less than one dollar a day for the average worker,” ASFA chief executive Martin Fahy said.

“For many Australians the increase to 12% SG is essential to offset the financial loss from super withdrawn under the COVID-19 early release scheme,” he added.

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