Government focus on superannuation most welcome
Deloitte Federal Budget media releaseDOWNLOAD
Tuesday 8 May 2012: “It was pleasing to hear the Federal Treasurer reaffirm the previously legislated increase in the Superannuation Guarantee (SG) to 12%,” said Russell Mason, National Superannuation leader at Deloitte. “For those who have recently joined or will join the Australian workforce, this 3% increase will mean a significant enhancement to their retirement savings.
“As the Treasurer stated: As a result of this reform, a 30-year old worker on average full-time earnings will retire at age 67 with an additional $118,000 in super.”
The SG increase is being phased in gradually from 1 July 2012 reaching 12% by 1 July 2019.
Mason added: “These additional savings, which will increase the lump sums available to Australians at retirement, throw into relief the need for the superannuation industry and the Government to work together to develop a range of post retirement products to address our longevity issues in Australia.
“According to Deloitte’s superannuation modelling, the proposed increase in the SG contribution rate will gradually impact the size of the pool of total assets, currently at $1.4 trillion, by an extra $408 billion by 2030. The model predicts that with this increase in the SG, population growth and the ageing population, the Australian superannuation system will grow to more than $6 trillion by this date.
“Our modelling showed that a single male retiring with an average account balance of $217,000 and taking a modest income stream of $22,000 per annum, has a 78% chance of outliving his retirement benefit.
“Clearly Australians will be relying on the age pension for some time to come,” Mason said. “So it is imperative that any proposals to deal with the ageing demographic consider the superannuation and social security systems in tandem.”