Call for Government to lead debate on adequate retirement incomes
10 May 2011: As expected the Government has used the Federal Budget to continue its focus on the ‘Stronger Super’ announcements it made in December 2010.
The Government has committed funding to APRA and ASIC for the introduction of the MySuper default superannuation product; the ATO and ASIC for the self-managed superannuation funds (SMSFs) reforms; and the ATO for the SuperStream measures.
“While the Government has committed funding to implement some of the ‘Stronger Super’ announcements, the Superannuation Industry will also be required to fund some of the changes,” said Deloitte Superannuation partner Noelle Kelleher.
“There will be an increase in the levy on APRA regulated superannuation funds and SMSFs will face a 20% increase in their lodgement levy. In addition, SMSF auditors will be required to pay an audit registration fee,” she explained.
“It is important to get the funding of the ‘Stronger Super’ measures right to make sure that they are successful and effectively regulated,” Kelleher said. “The Australian public is likely to judge the success of the ‘Stronger Super’ initiatives on whether they meet their expectations for retirement.”
Deloitte’s 2011 survey of the financial services industry found that 82.8% of the respondents believe that Australians will not have adequate income in retirement. This is an improvement on the previous year when 88.3 per cent of respondents believed that Australians would not have an adequate income in retirement.
“However there is still confusion about what ‘adequate income in retirement’ means,” said Kelleher. “There needs to be some clarity on this term, for without a ‘sensible’ definition, there is a real risk that Australians will be disappointed by what their superannuation delivers for them.” Kelleher said she would like to see the Government lead the debate on this issue.