Industry body calls on government to end policy tinkering with super
A lack of stability in the policy setting of superannuation is resulting in fewer individuals saving for retirement on a discretionary basis or saving less, which may ultimately lead to lower living standards in retirement, warns a superannuation industry body.
The Association of Superannuation Funds of Australia (ASFA) has released a six-step plan to drive industry-wide productivity gains in superannuation, as the impact of COVID-19 continues to disrupt Australia’s financial and economic conditions.
Ensuring greater stability in policy settings, ASFA said it is a critical part of strengthening and improving the efficiency of the superannuation system.
In a document detailing the plan, ASFA said substantial changes have been made to superannuation legislation and regulation in recent years.
“Tinkering with policy settings ultimately undermines confidence in the superannuation system and acts as an impediment to trustee strategic planning and the operational efficiency of funds,” it explained.
“A period of stability is needed to ensure that recent changes to the superannuation system are properly bedded down.”
Decreased confidence in the stability of policy settings, it said, means that fewer individuals will save for retirement on a discretionary basis, or will save less, leading to lower retirement savings, lower living standards in retirement and higher age pension expenditures for government.
“Policy uncertainty also greatly diminishes productivity in the sector, as it impedes funds and service providers when planning how to deliver services for their members in future,” it stated.
In order to achieve this, ASFA has suggested developing an RBA-type framework where the health of the superannuation industry is monitored and appropriate changes made only when vulnerabilities are identified.
It also suggested significant policy changes in superannuation could be linked to the publication of the five-yearly intergenerational report.
Miranda Brownlee is the deputy editor of SMSF Adviser, which is the leading source of news, strategy and educational content for professionals working in the SMSF sector.
Since joining the team in 2014, Miranda has been responsible for breaking some of the biggest superannuation stories in Australia, and has reported extensively on technical strategy and legislative updates. Miranda has also directed SMSF Adviser's print publication for several years.
Miranda also has broad business and financial services reporting experience, having written for titles including Investor Daily, ifa and Accountants Daily.