The Financial Services Council (FSC) has thrown its weight behind mooted changes to the age pension, with chief executive John Brogden also suggesting that the age for accessing superannuation should also be tightened.
Amid statements from Federal Treasurer, Joe Hockey, about the sustainability of the age pension regime, Brogden agreed that Australia’s retirement system was not sustainable.
“Reform is critical to ensure the age pension and superannuation system meets the needs and expectations of Australians in retirement,” he said.
Brogden said the FSC was therefore recommending increasing the superannuation access age to 65, tightening eligibility to the age pension, reforming early access arrangements for superannuation for those unable to work to a higher preservation age, and linking the age of retirement to life expectancy through a formal process guided by the Government Actuary.
“Many Australians starting work today will live for more than one century. Accessing superannuation at 60 is no longer viable,” he said.
Discussing the FSC’s recommendation that the preservation age at which Australians could access their super should be increased to at least 65, Brogden said a sustainable super system went hand in hand with a sustainable age pension system.
“Accessing superannuation at 60 when the pension is available at 67 encourages the wrong type of behaviour,” he said. “Superannuation and the age pension should work together to provide an adequate retirement for Australians.”
“When a couple who own their family home, have one million dollars in assets and an annual income of $60,000 are eligible to receive a part pension, it’s appropriate to question whether or not this the right way to spend taxpayers’ money.”
