ABA SAYS SAVINGS WILL NOT BE ADEQUATE FOR OUR RETIREMENT EXPECTATIONS DESPITE IMMINENT RISE IN SUPERANNUATION GUARANTEE Sydney, 19 June, 2002: The Australian Bankers’ Association says employers need to be ready for the additional cost associated with the 1% increase in compulsory superannuation contributions set to take effect from July 1, 2002. David Bell, Chief Executive of the Australian Bankers’ Association (ABA), said despite the rise in the Superannuation Guarantee from 8 – 9%, many Australians may have to endure rather than enjoy their retirement because we are simply not saving enough. “This increase in the Superannuation Guarantee will still not be enough to deliver a standard of living that many of us imagine for our retirement.” “The latest figures show that far from enjoying a life of leisure, the baby boomers may not even have enough retirement income to pay for necessities such as long-term healthcare and aged care.” “Under the current Superannuation Guarantee, to be capped at 9% of earnings, a person on average weekly earnings who has saved for 30 years will get only $19 000 including a part pension. Yet ANOP research undertaken in May 2001 tells us that six out of ten people feel they will need $30 000 or more in retirement.” (*see source below) The Federal Government’s Intergenerational Report, released with this year’s Budget, shows that the mild surpluses will swing to chronic deficits in 2017 –18 if policies are left unchanged. “This underlines the need for the Federal Government to take some early decisions on adequacy and in particular how contributions can be increased and how the system can be simplified so there are more incentives to save for retirement, ” Mr Bell said. The ABA is calling on the Federal Government to set a national goal for significantly increased retirement income provision through a combination of increased contributions from individuals, extended Government co-contributions, shifting super taxation to the benefit stage, and improved incentives for voluntary savings. “The broad middle income group, who face the bulk of the adequacy problem, need to contribute an additional 5%, on top of the existing 9%, " Mr Bell said.  The ABA has outlined these proposals in its submission to the Senate Select Committee Inquiry into Superannuation and Standards of Living in Retirement.  Notes for editors:  * Source: Association of Superannuation Funds of Australia Limited Fact Sheet - No 5 – An Inadequate Retirement Income? ABA submission can be downloaded from ABA website – www.bankers.asn.au “Intergenerational Report 2002-3, Budget Paper No.5” can be downloaded from the Budget 2002-3 website – www.budget.gov.au For further information contact:  Heather Wellard ABA PR Phone: 02 8298 0411 Mobile: 0409 830 439 ENDS