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Aussies ‘confused’ about value of super

03 September 2014 — 1 minute read

Research from the Actuaries Institute suggests the broader population is deterred by the “complexity and regular changes” to superannuation and therefore don’t recognise its value.

Australians are aware of the benefits of superannuation, but generally avoid engagement until later in life, typically from age 50, the Actuaries Institute Retirement Incomes white paper found.

Still, the paper found that the superannuation system is largely “doing what it was designed to do”.


“It is accumulating assets to fund adequate retirement income and is reducing dependence on the age pension,” the white paper stated.

Further, it found Australia’s least wealthy are and will remain entirely dependent on the age pension to maintain a modest lifestyle. However, younger cohorts will be better off in their retirement, given a lifetime of superannuation guarantee contributions.

The paper also found that the average taxpayer subsidy paid via the age pension will reduce for future retirees because of the superannuation guarantee.

“As a result, even though the proportion of people who have access to at least a part age pension will not reduce significantly, the level of the part age pension per individual will reduce,” the paper stated.

“This reduction in individual pension payments will partly offset the rise in the overall future cost of the age pension to taxpayers.”

Overall, this research concludes that the superannuation system is generally working but will not deliver a comfortable retirement lifestyle for all groups.

“Many current retirees were covered by superannuation for only a limited part of their working life and have accumulated most of their wealth through equity in the family home. Future generations of retirees will have a different wealth profile including a greater superannuation component,” the paper stated.

“Regardless of those differences, the age pension will continue to underpin the lifestyle of retirees.”

Aussies ‘confused’ about value of super
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