The Federal Government’s changes to Australia’s retirement incomes and superannuation regime have failed to make a significant impression on key players within the superannuation and financial services sector, according to a poll conducted by Towers Perrin.
The SuperPulse poll, carried out in the days immediately following Treasurer Peter Costello’s announcement, reveals that the majority (82 percent) of respondents did not believe the changes would provide significant encouragement to people to defer their retirement.
The poll suggests that, almost three quarters of respondents do not believe the measures will encourage individuals to save more towards their retirement.
The poll found that for the Government to achieve its goal of encouraging individuals to save more or defer retirement, respondents believe the Government needs to consider changes to taxes affecting superannuation.
In fact, the responses of those polled by Towers Perrin indicate they hold strong views about taxation, with 91 per cent suggesting a reduction in the contributions tax is needed, while 82 per cent believe the removal of the surcharge tax is required while 64 per cent believe there needs to be a reduction of tax on investment earnings.
“Interestingly, there was only modest support (36 per cent) for increases to the superannuation guarantee contribution — a measure touted by some industry observers, including a former Prime Minister,” the poll analysis says.
It says that while most respondents (91 per cent) believe that individuals must take primary responsibility for their own security in retirement, more than a quarter (27 per cent) also believe the Government needs to assume some responsibility.
Of the nine measures proposed by the Government, respondents identified the following as likely to have the most impact on improving the effectiveness of the retirement savings system:
w Allowing access to super benefits from preservation age while working;
w Removing the work test for super contributions before age 65;
w Simplifying the work test rules for those aged over 65; and
w Increased choice and competition in the income streams market.
Looking at the impact of the Government’s initiative on administration and management within the superannuation sector, the poll says that three proposals are expected to have the most impact:
w Simplifying the work test rules for those aged over 65.
w Removing the work test for superannuation contributions before age 65.
w Simplifying the superannuation guarantee notional earnings bases.
The poll analysis points out, however, that almost half of the respondents believe allowing access to super benefits from preservation age while working will have an unfavourable impact on administration/management, while 27 per cent believe the rollover of employer eligible termination will also be unfavourable.
