Despite previously suggesting a range of improvements for the super system, the Association of Superannuation Funds of Australia is now stating the current system is sustainable and that no urgent changes need to occur.
In a public statement the ASFA said that the super system had been adjusted continuously over the last few years and while it supports the continuous review of the systems, changes must be discussed and implemented with appropriate notice.
This statement follows earlier proposals for change by ASFA including a $2.5 million cap on the underlying capital funding superannuation pension streams and a lifetime non-concessional cap of $1 million.
Pauline Vamos, ASFA chief executive, said the key objective of the super system should be to provide a steady income stream for all Australians in their retirement.
The supplementary ASFA submission in response to the tax discussion paper, Ms Vamos said, focuses on several key ways for the system to achieve these objectives.
“These include moving to 12 per cent superannuation guarantee contributions as soon as possible, maintaining the low income superannuation contribution after 2017, broadening the coverage of superannuation, and providing beneficial social security treatment for at least some retirement income streams,” said Ms Vamos.
The submission has also called for the compulsory superannuation regime to include some, or all, of the self-employed.
ASFA said that nearly 10 per cent of the current labour workforce are self-employed, and it is likely that the majority of these workers will find themselves without sufficient business assets to support a comfortable standard of living in retirement.
"We cannot ignore the large proportion of self-employed Australians who are putting off planning and saving for their retirement," said Ms Vamos.
The submission also recommended that the social security system provide incentives for income streams offering long-term longevity protection.
“In order for the superannuation system to achieve its key objectives, we need better integration between superannuation income streams and the provision of the age pension," said Ms Vamos.
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