Industry groups have welcomed the Federal Government’s new rules making it easier for those nearing retirement to make catch-up contributions to their superannuation.
CEO of the Australian Institute of Superannuation Trustees (AIST), Fiona Reynolds, said older people needed the opportunity to “supercharge their superannuation – and the higher concessional cap for the over 50s recognises this”.
The Financial Services Council’s CEO, John Brogden, said the decision to double the concessional contribution cap to $50,000 for individuals aged 50-plus with balances below $500,000 would go a long way to delivering Australians an adequate retirement.
Reynolds said that turning 50 was often a time when children had left home, the mortgage had been paid off, and so it made sense that people in this age group were able to put more money into super.
Brogden said that raising the contribution caps recognised that many people had the capacity to increase their superannuation contributions in their 50s and that “they should not be discouraged from doing so”.
AIST would be making a submission to Treasury, Reynolds said, because “we would like to see some flexibility around the caps – such as currently exists with the non-concessional cap limit – which is $150,000 for one year, or $450,000 in any three years”.
“Similar flexibility with the concessional cap limit would allow people to roll three years’ worth of contributions in the one year, such as in situations where they have received an inheritance or redundancy payout,” she said.
The FSC said the measure, combined with the Government’s commitment to increase the Superannuation Guarantee to 12 per cent, would help address Australia’s $897 billion retirement savings gap as well as the pressures associated with an ageing population.
