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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.
