The superannuation guarantee (SG) contribution rate will increase from 10% to 10.5% from tomorrow (1 July), increasing the balances of millions of members.
It coincided with the 30th anniversary of the SG, which was introduced in 1992.
Contribution rates were legislated to increase further to 12% by 2025.
Chief executive of the Financial Services Council (FSC), Blake Briggs, said: “The introduction of the superannuation guarantee has been the driving force behind the transformation of Australia’s retirement system into one of the most successful and largest private pension systems in the world, managing $3.4 trillion in assets.”
Eva Scheerlinck, chief executive of the Australian Institute of Superannaution Trustees, said: “We should be very proud of what we have achieved as a progressive nation, building a superannuation system with almost universal worker coverage. The industry too can be proud of what it has delivered for super fund members over the last three decades, ensuring many Australians no longer have to rely solely on the age pension when they leave the workforce”.
The Retirement Income Covenant (RIC) would also come into force which required super funds to develop a retirement income strategy for their members and publish a summary of this on their website.
These needed to consider how retirees could maximise retirement income, offer flexibility in how it was accessed and manage the associated risks.
“In another 30 years, we will look back and see the introduction of the Retirement Income Covenant as an important step in making sure the superannuation system fulfils its promise of delivering a comfortable standard of living for Australians in their retirement,” said Briggs.
Earlier this month, super funds discussed how it was difficult to create these products without knowing members’ life expectancy.
