Budget measures designed to give retirees control in increasingly ‘opaque’ super environment
Senator Jane Hume has assured that the superannuation measures announced in the federal budget aren’t aimed to force retirees to draw down on savings but instead create greater control in an increasingly complex super environment.
Addressing the Australian Institute of Superannuation Trustees CMSF 2021 conference, Minister for Superannuation, Financial Services and the Digital Economy Jane Hume said that the measures made in this year’s federal budget have highlighted the importance of flexibility in super.
She noted the changes such as reduction of the eligibility age for the downsizer contribution and the removal of the work test for non-concessional contributions are all part of providing flexibility for older Australians to manage their retirement savings to suit their individual circumstances and the flexibility to save more for their retirement than is mandated by the superannuation guarantee.
“As the Retirement Income Review made abundantly clear, your quality of life in retirement is made up of efficient and effective use of all three pillars, including the Aged Pension and savings outside of superannuation,” Ms Hume said.
“Retirees should have the confidence to draw down on their retirement savings knowing that the Age Pension will always be there to support them should their savings not last as long as they planned.
“Let’s be very clear here. This is not about forcing retirees, current or future, to draw down on savings through rigid policy settings or punitive regimes that restrict their choice and agency. In fact, quite the opposite.
“It’s about giving retirees control of their retirement income no matter what the economic circumstances. And the flexibility and the confidence to use their assets more effectively should they choose to do so.”
Ms Hume said these changes come on the back of the Your Future, Your Super reforms announced in the October budget last year. She noted the Your Future, Your Super package is estimated to benefit members by around $17.9 billion over the next decade.
“Swimming upstream against a torrent of critics to make our system better, fairer and more efficient for its members has been no easy feat, but the futures of Australian retirees depends on it,” she said.
“Today, Australians are more likely to move between jobs and industries and, for most people, superannuation is their primary, if not the only, vehicle for their retirement savings.
“Our system is complex. It’s compulsory. It’s opaque. And it’s been plagued by disengagement. But as more Australians rely on superannuation as their primary source of retirement income, much more is at stake financially than it was at superannuation’s inception.
“Those vestiges of a past system that tied retirement savings to workplace relations have endured. Super needs to adapt to better meet the needs of a modern workforce. And its structural flaws, unintended multiple accounts and entrenched underperformers are harming millions of members.”
Tony Zhang
20 May 2021
smsadviser.com
Latest Newsletters
Hot Issues
- Aged care report goes to the heart of Australia’s tax debate
- Removed super no longer protected from creditors: court
- ATO investigating 16.5k SMSFs over valuation compliance
- The 2025 Financial Year Tax & Super Changes You Need to Know!
- Investment and economic outlook, March 2024
- The compounding benefits from reinvesting dividends
- Three things to consider when switching your super
- Oldest Buildings in the World.
- Illegal access nets $637 million
- Trustee decisions are at their own discretion: expert
- Regular reviews and safekeeping of documents vital: expert
- Latest stats back up research into SMSF longevity and returns: educator
- Investment and economic outlook, February 2024
- Planning financially for a career break
- Could your SMSF do with more diversification?
- Countries producing the most solar power by gigawatt hours
- Labor tweaks stage 3 tax cuts to make room for ‘middle Australia’
- Quarterly reporting regime means communication now paramount: expert
- Plan now to take advantage of 5-year carry forward rule: expert
- Why investors are firmly focused on interest rates
- Super literacy low for cash-strapped
- Four timeless principles for investing success
- Investment and economic outlook, January 2024
- Wheat Production by Country
- Time to start planning for stage 3 tax cuts: technical manager
- Millions of Australians lose by leaving savings in default MySuper funds
- Vanguard economic and market outlook for 2024: A return to sound money
- An investment year of ups and downs
Article archive
- January - March 2024
- October - December 2023
- July - September 2023
- April - June 2023
- January - March 2023
- October - December 2022
- July - September 2022
- April - June 2022
- January - March 2022
- October - December 2021
- July - September 2021
- April - June 2021
- January - March 2021
- October - December 2020
- July - September 2020
- April - June 2020
- January - March 2020
- October - December 2019
- July - September 2019
- April - June 2019
- January - March 2019
- October - December 2018
- July - September 2018
- April - June 2018
- January - March 2018
- October - December 2017
- July - September 2017
- April - June 2017
- January - March 2017
- October - December 2016
- July - September 2016
- April - June 2016
- January - March 2016
- October - December 2015
- July - September 2015
- April - June 2015