Does superannuation need a break from the constant tinkering and ad hoc review and reform to rebuild consumer confidence in the system?
Yes, according to the Association of Superannuation Fund of Australia (ASFA).
In a survey commissioned by ASFA last year, nearly half the 1,000 respondents believed the government makes too many changes to super rules and about a quarter said recent changes had reduced their confidence in super.
ASFA CEO Dr Martin Fahy said consumer focused innovation and use of technology could only develop at pace if the industry was provided with an opportunity for some clear air.
“Over the past decade, we have been inundated with legislative change. Major regulatory reforms have imposed significant implementation and ongoing costs on the industry,” he said.
“In addition, every federal budget in recent memory has included superannuation reform and this diverts the industry’s energy and resources into adapting to those changes.
Dr Fahy said many Australians were now retiring with significant superannuation balances.
“Many singles and couples who are recent retirees from the paid labour force and have reached the qualifying age for the age pension will have assets sufficient to be affected by the assets test for the age pension,” he said.
“ASFA recommends no further adverse changes be made to superannuation tax provisions or to the age pension without a holistic review being undertaken in the context of scheduled Inter-Generational Reviews, with the next review due in 2020.
“The super industry now needs space to focus on responding to shifting demographics, the changing needs of members and develop its capacity for technological excellence.”
“With greater stability in settings, there will be greater confidence in super and that will result in higher voluntary contributions and improved long-term outcomes for super savers.”
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