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The government has quashed hopes of a boost to the 9 per cent superannuation guarantee, with Minister for Superannuation Nick Sherry ruling out any change to the contribution. Speaking at a post-Budget breakfast held by the Australian Institute of Superannuation Trustees (AIST), Sherry said: “I do not believe employers should be paying any more, full stop, unless they want to make additional payments voluntarily. “The 9 per cent superannuation guarantee I don’t think in any way, shape or form is going to change in any significant way.”

Instead, Sherry said where there was an inadequate level of saving, the co-contribution, which has been temporarily reduced until 2014, could be increased at some point in the future. Responding to a question from Naomi Steer, director of Asset Super about whether 9 per cent was sufficient, Sherry said the increase in the age at which people can access the Age Pension (from 65 to 67) should be factored into any modelling on adequacy and retirement incomes. “We have to face up to the reality that people are living longer, and that the system that was developed 100 years ago is no longer sustainable,” he added.

“The longer you leave tackling access the worse the problem will become because people are living longer,” Sherry said. “We need to think about our kids and our grandkids because the cost of paying for this is going to be significant.” Fiona Reynolds, chief executive officer of AIST, said the proposed rise in Age Pension eligibility was concerning, and that there were better ways to look at retirement provision including encouraging self-provision and incentives to delay taking the Age Pension for those who are able to work past retirement age.

She said a proposal in the Henry Review’s Report on Strategic Issues to lift the preservation age for super in line with the Age Pension would have “serious consequences”, potentially resulting in people saving outside the retirement system. The paper, which was released with the Budget last month, also recommended leaving SG contributions at 9 per cent. In its Budget commentary, Rice Warner said while it agrees that employers should not bear an additional SG levy, a process of soft compulsion – for example 3 per cent employee contributions introduced over a five-year period – together with the government co-contribution payments for low-income earners would go some way to providing a comfortable retirement for all.

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