The Association of Superannuation Funds of Australia (ASFA) wants to guarantee that at least 50 per cent of Australians lead a ‘comfortable' retirement life by 2050.
In its submission to the Financial System Inquiry interim report, ASFA said the superannuation system needs to set long-term goals against which its progress can be monitored.
ASFA set four goals it wants achieved by 2050 to ensure government spending on retirement either through tax incentives or the age pension is sustainable in the long-term.
It wants to limit age pension and tax expenditures on super to less than six per cent of GDP. It also wants to cut the number of retired Australians depending solely on the age pension by half to 20 per cent.
ASFA wants to attain an income replacement rate in retirement for household disposable income of more than 65 per cent.
ASFA CEO Pauline Vamos said regulatory framework should then be in line with these goals, and should be principles-based.
"This will enable it to adjust to the changing environment, including the increase in people seeking to exercise greater control over their superannuation, for example via self-managed super funds (SMSFs), the growth of service providers and other structures that lie outside the current regulatory perimeters, as well as the growing number of superannuants that are seeking secure income streams throughout their retirement," Vamos said.
It also identified the lack of choice in flexible retirement income products to meet the different needs of Australia's retirees.
"For example, we know that when consumers choose an income stream product, they must be able to compare the costs benefits and risks relevant to their own individual circumstances," ASFA CEO Pauline Vamos said.
