ABA WELCOMES PROPOSED CHANGES TO AUSTRALIA’S RETIREMENT INCOME SYSTEM

Sydney, 25 February, 2004: The Australian Bankers’ Association (ABA) has welcomed proposed changes announced today by the Federal Government to assist Australians to achieve a higher income in retirement.

The ABA said Federal Treasurer Peter Costello’s range of options on the retirement income system released today in the policy paper, ‘Australia’s Demographic Challenges’ are of critical importance because of Australia’s ageing population.

David Bell, Chief Executive of the ABA, said: “The industry is very pleased to see the emphasis on planning for retirement and closing the gap between retirement expectations and likely retirement incomes.”

“The initiatives announced by the Government are certainly steps in the right direction in encouraging savings for retirement.”

“They are necessary because currently Australians are not saving enough.”

“The initiatives, to enable people to combine part-time work and retirement income, are a positive approach in responding to the nation’s demographic challenges.”

“The Government’s actions to enable the development of complying market-linked income stream products recognise that many Australians will have a long life expectancy, and that offering the widest possible investment choices after retirement from full-time employment is a sensible strategy.”

The ABA notes that the Treasurer has proposed that complying market-linked income stream products will benefit retirees because they would be less affected by the age pension assets test or the reasonable benefit limits.

Mr Bell said: “We look forward to responding to the issues raised in the policy paper, in particular, the ABA will bring a strong priority for improving Australians’ financial literacy skills in managing their superannuation.”

For further information:

Heather Wellard
ABA Public Relations
Phone: 02 8298 0411
Mobile: 0409 830 439

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