The Government has released the consultation paper for the definition of superannuation.
The proposed objective put forward by the Government was now open for feedback on its framing, benefits and practical application.
This was: “The objective of superannuation is to preserve savings, to deliver income for a dignified retirement, alongside government support, in an equitable and sustainable way”.
- Preserve savings restricts access to superannuation savings for a person’s retirement only;
- Deliver income emphasises the principle of superannuation- to provide income in retirement;
- Dignified denotes the importance of financial security and wellbeing in retirement;
- Government support intends to encapsulate and highlight the superannuation system’s interactions with the Age Pension pillar, as well as other Government support;
- Equitable and sustainable signifies that the system should provide similar outcomes for people in similar circumstances and government support should be targeted to those in need. Superannuation also needs to fit within the broader fiscal strategy.
Alongside this, the Government proposed two alternative definitions.
The first alternative was: “The objective of superannuation is to deliver income for a dignified retirement, alongside government support, in an equitable and sustainable way”.
The second was: “The objective of superannuation is to support savings to deliver income for a dignified retirement, in an equitable and sustainable way”.
“Clarification of the objective of superannuation in law will provide a shared understanding of the role of the superannuation system and anchor any future superannuation policy settings to a meaningful base.
“It will enshrine the core goal of supporting delivery of retirement incomes in law. Haphazard or inconsistent changes in superannuation system policy undermine the community’s trust in the system and increase costs to trustees, regulators, and ultimately members.”
The closing date for submissions was 31 March, 2023.
