Super is for Retirement
Legislate an Objective of Super that safeguards Australia’s retirement savings
The Federal Government will soon move to legislate an Objective of Super – it’s a good proposal because it reflects what the public think super is for – savings solely for retirement.
Enshrining the Objective of Super into law is a long-standing ambition and if well-designed could safeguard and help grow the retirement savings for all Australians.
The Superannuation Guarantee was introduced over 30 years ago, and since then, changes to the system have been made without formal agreement about what the system is trying to achieve for Australian workers. At times, this has led to policies that have delivered poor retirement outcomes for workers.
Preservation – which is that super is preserved until a member reaches retirement age - is critical to securing a better standard of living in retirement for more Australians.
Policies that bust open super early – like the COVID-era early release of super scheme - dramatically erodes savings and harms quality of life in retirement.
A March UMR survey of 1,141 people found that almost 80% of Australians agree that super is for providing financial security in retirement and that two thirds of Australians agree super should only be accessed before retirement age in cases of extreme hardship – only 12% disagreed.
The government has captured this community sentiment in its proposed wording on the Objective of Super – which states that:
“The objective of superannuation is to preserve savings to deliver income for a dignified retirement, alongside Government support, in an equitable and sustainable way.”
There’s four key principles in the government’s proposal - preservation, equity, sustainable and dignity in retirement – that Industry Super Australia’s Chief Executive Bernie Dean unpacks in this opinion piece.
But the key is preservation – as this is the cornerstone of the super system on which the nation’s retirement savings are built.
Legislating this Objective of Super that has preservation at its core will protect the retirement savings of Australians now and for future generations.