Treasurer Josh Frydenberg’s long-awaited review of Australia’s retirement income system has been broadly welcomed by an industry weary of repeated government inquiries.
There were little surprises in the terms of reference announced last week – which will examine the so-called ‘three pillars’ of age pension, superannuation and voluntary savings – other than the short time-frame provided for the panel to respond. The consultation paper will be published in November and the panel must report by June 2020.
UniSuper chief executive Kevin O’Sullivan said he wants to see an “evidence base” come out of the review to help solve some of the key policy issues, while QSuper’s CEO Michael Pennisi is looking for longer-term certainty for his members. PwC Australia’s Catherine Nance says she wants the review to stick to fact finding and steer clear of politics.
Kevin O’Sullivan, CEO UniSuper:
“We broadly support the government’s review of retirement income. While it’s early days, the terms of reference seem to focus on big, macro issues, including how the pillars interact to support people in retirement. We have had numerous reviews over the past decade, and we’d be looking to see an evidence base coming out of this review to settle some important retirement income policy issues; most notably, the role that superannuation plays in the broader retirement income system.”
QSuper CEO Michael Pennisi:
“It’s important to retain focus on the purpose of the superannuation system – which is to maximise savings that can produce income when people retire from the workforce. The system is strong but can always be refined. The alignment between the superannuation and aged pension systems is of importance as are the broader issues created by an ageing population. One issue that a thorough review can deliver is long term certainty to give our members confidence that their lifetime of saving through superannuation will meet their needs through their whole life.”
First State Super Deputy CEO Graeme Arnott:
“Our members are the carers and protectors of our community including nurses, teachers, police and emergency services workers. For them, compulsory superannuation is an essential part of their retirement savings plan. Australia currently has one of the most highly-regarded superannuation systems in the world but that does not mean that we cannot make the system better. We are now living longer than even 20 years ago. For this reason, we believe it is important that we preserve the best of what the current system has to offer, including the planned superannuation guarantee increase to 12% by 2025. We agree there is more that can be done to improve simplicity, certainty and transparency in superannuation and the interactions with social security, to help all Australians prepare for a better financial future. We look forward to actively participating in the review and advocating for policies that deliver the best possible long-term outcomes for our members.”
Catherine Nance, partner at PwC Australia and director on the Government Employees Superannuation Board:
“It’s long overdue. We need to have a review of how the whole system fits together, in terms of superannuation, voluntary savings, aged pension and aged care. We’ve seen too many changes made in a piecemeal fashion and a lot of people make comment on the system when they don’t understand it. There has been too much political change. So it’s a good thing that it is a fact-based review. It’s not about putting forward policies or recommendations, because they can become very politicised, very quickly.
“We need to get a common set of facts so people can discuss policy on the back of them. It means we can try and keep some politics out of this. I would hope that this leads to a more informed debate in the future, because if you change one lever in the system you have to look at how that might impact on the other. A lot of work needs to be done on the integration between aged pension and super saving and also the interaction between aged care means testing and the aged pension means testing. The government has to decide what the overall objective is? What are we aiming for with our three pillars?”
Eva Scheerlinck, CEO of Australian Institute of Superannuation Trustees:
“We are all bit reviewed out in this industry, but it is probably about time that we look at the parameters of the system. Recommendations coming out of a process like this would be very useful. We are looking forward to seeing some robust debate. We are pleased to see how broad the terms of reference are but the time frame for turning this around is awfully short.
“What we are talking about is the three pillars of retirement which includes savings. I would like them to examine what that means for low income earners. I’d like to see a focus on those that are less well off and also have them look through a gender lens. There are different outcomes from the system for women and men and we can’t ignore that. What are some of these causes and where we can see some areas for improvement?”