subscribe to our newsletter

Upping SG rate ‘not obviously right’

2 up arrows on graph 345x216
Katarina Taurian
06 October 2016 — 1 minute read

Off the back of new research, the Grattan Institute is suggesting that a focus on upping the superannuation guarantee to 12 per cent misses “at least half the picture” on what is necessary for effective retirement income strategy.

Households often save significant income outside of superannuation which contributes to their retirement income portfolio, the Grattan Institute’s chief executive John Daley told SMSF Adviser.

“It turns out that for people, on average, those non-super savings are typically as large and if not larger than their superannuation,” Mr Daley said.


“So if you’re going to be making retirement income policy, you shouldn’t assume that the only savings people have are going to be superannuation.”

Mr Daley said pushing the superannuation guarantee up to 12 per cent is therefore “not obviously the right answer” in terms of solving the looming longevity issues facing the Australian population.

“There’s nothing wrong with compulsory super. It does indeed force people to save money that they wouldn’t save otherwise.  It has increased overall savings rates. The question is, what’s the right balance?” he said.

The government needs to broaden its approach to retirement income policy to reduce an excessive focus on superannuation, to accurately take into account the savings that actually form wealth and income in retirement, Mr Daley suggested.

“There is more to life and more to retirement than super and you need to think about what the holistic package looks like.”


Upping SG rate ‘not obviously right’
2 up arrows on graph 345x216
smsfadviser logo

Are you up to date with the legislative changes from 1 July? Contribution cap increases, super guarantees, age increases, SG rate increases. The budget announcement changes. Don’t be caught off guard by your clients’ questions. Prepare for any scenario with the SMSF Foundations course. 21 CPD hours available. Learn more

Arm yourself with the critical information that you need to ensure you and your clients continue to thrive in today’s changing environment at the free-to-stream SMSF Adviser Technical Strategy Day. Live streamed directly to you in October over three days, this event is jam-packed with expert-led sessions to arm you for success by providing the latest updates on regulatory and legislative changes impacting SMSFs. Secure your free spot today, visit www.smsfstrategyday.com.au

join the discussion

Latest poll

Do you have clients that are aged 65 or 66 planning to trigger the bring forward rules?


Get the latest news and opinions delivered to your inbox each morning

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.