Quantifiable targets need to be established for income streams in retirement and the success of superannuation in order to improve the confidence of Australians in the super system.
ASFA chief executive Pauline Vamos said that if the superannuation system is to progress, three areas need to be focused on: “ensuring adequate delivery of income stream in retirement; defining the superannuation system's purpose and understanding what 'success' looks like; and improving the system to better align with the principles and goals that underpin it".
There are four benchmarks that ASFA believes the super system should meet by 2050, including having less than 20 per cent of retired Australians relying solely on or almost exclusively on the age pension and ensuring age pension expenditure and tax expenditure on superannuation of less than six per cent of GDP.
ASFA also said the system should aim to achieve an income replacement rate in retirement of at least 65 per cent and that 50 per cent of Australians be able to cover their expenditure in retirement and have a comfortable retirement lifestyle.
"The parameters of the system need some work if we are to meet these retirement goals," said Ms Vamos.
"Measures such as increasing the Superannuation Guarantee to 12 per cent as soon as possible and raising the superannuation eligibility age in line with the Age Pension are two such examples.”
Any changes need to be enacted with minimum disruption to the current retired population, she added.
"As such, ASFA strongly supports bipartisan legislation on the goals and objectives of the superannuation system in order to frame discussion and policy decisions over the coming years," Ms Vamos said.
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