Tom Garcia, chief executive of the Australian Institute of Superannuation Trustees weighs up the impact of pensions at 70

Retirement is about people and policies must work to improve the lives of all, not just those whose work/life experience neatly tracks the actuarial forecasts.

While many of us will indeed be living longer and be fit, able and willing to work until our mid Sixties and beyond, a significant minority of Australians won’t be so fortunate. How many of us know a 65 year old construction worker, let alone one that is aged 70 years?

But it’s not just older workers in physically demanding jobs – some of whom have been working since their teens – who are unable to work longer. Recent research by AIST and the Australian Centre for Financial Studies (ACFS), highlights that up to 40 per cent of older Australians could be classified as involuntary retirees, if roles involving caring for others are considered.

The research, which analysed retirement trends of Australians, found that age discrimination, ill health, job type, low levels of education, poor English proficiency and caring demands are key determinants for involuntary retirement. Those working in community and personal services, in clerical and administrative roles, sales workers and labourers are between 50 and 35 per cent more likely to retire before the age of 60
than professional workers.

Budget sustainability is critically important, but so is looking after vulnerable older workers. Any Government considering lifting the retirement age, must also consider accompanying measures to improve workforce participation among older workers. This could include supporting policies that help breakdown age discrimination in the workforce and a greater commitment to retraining older workers who have been made redundant, such as those currently facing job losses in the car industry. Given the high rate of involuntary retirement among older migrant workers, programs to improve English proficiency may help this cohort.

The interaction of the Age Pension and the super access age (preservation age) also requires careful thought. If it is inevitable that the age at which people can access their super moves up in line with a rising retirement age, we may need to consider early release provisions for those in genuine need who meet specific criteria to determine involuntary retirement.

When we talk about lifting the Pension Age, we are talking about millions of Australians working for five decades, if not longer. This will work for some, but others will get sick, they’ll get retrenched or they may have to quit their jobs to look after grandchildren, ageing parents or ill spouses. Any changes to our current policy settings must take into account this reality.

AIST is the peak industry body for the $600 billion not-for-profit super sector which includes industry, corporate and public sector funds covering the super interests of nearly two-thirds of the Australian workforce.

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