Retirement income adequacy needs to be modelled on consumption needs as opposed to subsidising a percentage-of-salary model for all workers, AustralianSuper believes.
The superannuation fund said in its submission to the Government’s Retirement Income Review that the percentage-of-salary model led to low income earners aspiring to earn less than their model wages, while high income earners would seek taxpayer subsidies for a percentage of their high income being enjoyed in retirement which was inequitable.
“The taxpayer burden in super needs to be seen through the lens of minimum provision to support retirement objectives, rather than relative to wealth during employment,” it said.
The super fund said it supported a budgetary standard (Association of Superannuation funds of Australia Comfortable standards) over a replacement rate scenario as:
Advantages of budgetary standards were:
A number of measures, including super on Paid Parental Leave, funding to recover unpaid super, and frameworks to encourage investment in the energy transition, have been welcomed by the superannuation industry.
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