Gold Logie For 12% Super

Gold Logie for 12% super:
Average Australian $100k*d Better Off in Retirement

The average Australian could be as much as $100,000* better off in retirement thanks to the Government's decision to increase compulsory super to 12 per cent, said the Australian Institute of Superannuation Trustees.

Commenting on the Government's response to the Henry Review recommendations, AIST CEO Fiona Reynolds described the move to 12 per cent as a significant win for all Australians.

"This is the one rate rise we had to have and one that every Australian should applaud. It's a Gold Logie performance by Henry and the Government," said Ms Reynolds.

Ms Reynolds said the new measures addressed most of the industry's long-held concerns about the inadequacy of Australian retirement incomes.

"This is a well-rounded package that deals with the problem of low-income earners and older workers being disadvantaged by the current super tax arrangements".

Ms Reynolds said the Government had adopted a series of long-standing AIST policies. This included AIST's recommendation to the Henry Review to double the concessional cap for older workers with retirement balances of less than $500,000.

"We have long argued that older workers who have not benefitted from a working lifetime of nine per cent superannuation need more incentives to top-up their super," she said.

Ms Reynolds also welcomed the decision to phase in the 12 per cent rise from 2013 to 2019, saying this time-frame would give both employees and employers time to adjust. AIST called for bipartisan support for the measures to end the constant tinkering with the system.

"We need all political parties to support these new measures so that Australians can plan for their retirement with certainty," Ms Reynolds said.


AIST's Henry report card:

* SG 12% by 2020 - a landmark decision and one that AIST's recent CoreData survey suggests nearly 2/3 of Australians support and would be prepared to pay for it out of their own wages;

* 15% contribution tax rebate for low-income earners: a welcome move to address the inequities of the super system without penalising those on higher salaries.

* Older workers Concessional caps to stay at $50,000 for those with retirement balances of $500,000 or less. This is a victory for the Over 50s who have not had the benefit of a working life of compulsory super. AIST advocated for this in our pre-budget submission.

* SG to apply until age 75: a necessary measure given our ageing population


*Based on a 25 year earning $55,000 until age 65, with an assumed earning rate
of 7.5%.

AIST CEO
Fiona Reynolds: 0408 336 116;

Media Manager
Janet de Silva: 0448 000 499

AIST is the peak industry body for the $450 billion not-for-profit super sector which includes industry, corporate and public sector funds covering the super interests of nearly 2/3 of the Australian workforce.

DISCLAIMER

This summary is intended as information only and should not be used in the place of legal or other advice. Australian Institute of Superannuation Trustees expressly disclaims all liability and responsibility to any person who relies in full, or in part, on any of the information contained in this summary, or is omitted from it.

SOURCE: Australian Institute of Superannuation Trustees