The SMSF Owners’ Alliance noted the government is saying its $1.6 million benchmark produces a pension equivalent to four times the age pension and equates to a $100,000 tax-free benefit for people on defined benefits schemes.
Dr Ron Bewley, former head of the School of Economics at the University of NSW, believes there is "serious doubt" that there is any reasonable comparability between the $1.6 million cap, a defined benefits pension of $100,000 and a notional amount ($90,884) equal to four times the age pension.
"I found the differences between these pensions are so great that no reasonable person could draw that conclusion," he said.
The SMSFOA said in follow-up reports, Dr Bewley will show that a superannuation savings cap in excess of $3 million is necessary for some reasonable degree of comparability.
Using ASIC’s MoneySmart calculator, Dr Bewley looked at income streams that could be generated from a superannuation account of $1.6 million, SMSFOA said.
MoneySmart assumes returns of 8 per cent for balanced funds, 6 per cent for capital stable and 5.5 per cent for capital guaranteed.
Dr Bewley found that under the capital guaranteed option, a retiree aged 60 with $1.6 million in their account would run out of superannuation savings after 20 years, with the capital stable option after 21 years and the balanced option after 29 years.