AUSTRALIAN BANKERS’ ASSOCIATION SAYS NATIONAL REFORM GOALS ARE NEEDED TO BOOST RETIREMENT INCOME AND SAVINGS
Sydney, 5 September, 2003: The Australian Bankers’ Association (ABA) is urging support of amending regulations to remove the impediments to superannuation portability, so that all customers are given the choice to consolidate their multiple accounts, and save on fees.
As early as next week, the Opposition and minor parties will consider disallowing the Government’s regulations that enable superannuation accounts to be portable for all consumers.
David Bell, Chief Executive of the Australian Bankers’ Association, said: “Given that portability is already available for the balances in twelve million retail superannuation accounts, it would be disappointing if politicians decided to deny this benefit to many members of industry and corporate funds.”
“The Financial Sector Reform legislation, a renewed emphasis on fee disclosure and an industry push to improve financial literacy skills, in particular concerning superannuation, are all positive developments that support greater choice.”
“Giving consumers more say over where their funds are directed is an incentive which may encourage a lift in national savings, and in particular, long term savings by households.”
“Australians are not saving enough for retirement resulting in a gap between the expectation and aspirations for their standard of living in retirement and what the present system will actually deliver.”
“Most working Australians joined superannuation schemes for the first time fifteen years ago, when national savings was high on the agenda.”
“Down the track, the generation of retirees now approaching retirement – the baby boomers – may be disappointed with the size of the gap between their aspirations and their level of retirement income.”
Mr Bell said the recent report commissioned by the Investment and Financial Services Association (IFSA), shows that people have less than half of the amount they need to live well in retirement.
IFSA’s report also identifies the policies that could encourage greater savings – principally impediments to voluntary savings, simplification and changes in the timing and amount of tax paid. There is also scope for maximising retirement incomes, with higher workforce participation and a wider range of permissible investment strategies.
Mr Bell said Australia does have a world class superannuation system in place, but in the first instance people must be willing to save more for their retirement.
“The critical element that is needed to bring about the changes so that people can live well in retirement is bi-partisanship.”
“It is disappointing that the superannuation debate remains stalled as a result of sectoral and ideological conflicts, when the interests of future generations of retirees should be driving the debate.”
“It would be a shame if Australia’s superannuation system failed to realise its potential because of the lack of agreement on these important issues.”
Mr Bell said the Federal Government’s Intergenerational Report shows that mild budget surpluses will swing to chronic deficits in 2017-18 if existing superannuation policies are left unchanged.
“The Intergenerational Report underlines the importance of tackling these issues sooner, rather than later. The longer we wait, the more expensive it will become to resolve these issues.”
For further information:
Heather Wellard
ABA Public Relations
Phone: 02 8298 0411
Mobile: 0409 830 439
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