National Seniors Australia (NSA) stated its commitment to ensuring the effective operation of superannuation for both current and future generations and expressed its belief that the current proposal does not align with the desires of the public.
“While we support the intent of defining an objective for superannuation, we believe the proposed objective is flawed and is not in the public’s best interests or what the public wants from super,” it stated in its submission to Treasury.
The NSA noted that according to the explanatory notes from the Treasury, the stated objective of superannuation does not change the existing responsibilities of superannuation trustees or the rules governing how members’ funds can be invested or accessed. However, it does serve as a reminder to trustees of their role within the superannuation system, including the importance of supporting members comprehensively throughout their working lives and into retirement.
The peak association body has made three key objectives in its submission.
First, it stated that the objective as it now stands puts too much emphasis on the end use of superannuation.
“By using the phrase ‘preserve savings’, the proposed objective neglects accumulation as a fundamental part of the superannuation system. There are no savings without accumulation,” it stated.
“Many people draw on super earlier due to life circumstances. A superannuation objective should be flexible enough to accommodate diversity of life courses and circumstances.
“For example, in some cases, people need to access their superannuation before they reach preservation age in situations of ill health.”
Second, the submission pointed out that the current proposed objective of superannuation, by incorporating the word “retirement,” places excessive emphasis on a linear life trajectory and perpetuates the notion that an individual’s adult life can be neatly divided into periods of work and retirement.
“People withdrawing superannuation over the preservation age of 60, whether eligible for the age pension or not, may still be working (or providing informal care to others),” it stated.
“Many people continue to work while receiving a portion of their superannuation via a transition to retirement to boost their overall income and standard of living.”
It continued that the word retirement is at odds with the need to retain workers and boost workforce participation.
Finally, the NSA said the term ‘income’ represents a narrowing of the interpretation of superannuation.
“People want the flexibility to use their super to either provide a regular income stream or lump sum payments,” it stated.
“This gives people greater choice when managing their affairs in later life. Lump sums are useful when purchasing large consumer items such as a vehicle, caravan, home modifications, solar panels, holidays, or white goods.”
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