Australians largely see super as retirement savings vehicle

As the government looks to finalise a clear objective of superannuation, a national poll has revealed that the majority of Australians believe it should be about ‘preserving savings to deliver income for a dignified retirement, alongside government support, in an equitable and sustainable way’.

The poll of over 2,500 people conducted by CT Group on behalf of the Financial Services Council (FSC) found that 53 per cent of respondents agreed with the government’s proposed wording in the Superannuation (Objective) Bill 2023, which was tabled in Parliament in November last year.

Last week, the Senate economics legislation committee began hearings on the bill.  

“We congratulate the government on moving ahead with a simple definition that can be commonly understood by all Australians and that the superannuation industry is unified on,” said Blake Briggs, chief executive of the FSC. 

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“Clearly defining the purpose of superannuation will help provide certainty for the 16 million Australians who are doing the right thing by saving for their own retirement.”

He posited that an enshrined objective for superannuation would “lead to more stability in policy settings” and end the cycle of constant tinkering, which “undermines confidence in the system.”

“Once legislated, the Objective will help drive the focus of policy reform to address systemic issues, such as including superannuation contributions on government paid parental leave to help close the gender gap where women retire with 18 per cent less superannuation than men,” Briggs said.

Previously, the government’s 2023 Intergenerational Report found that, as balances increase, super is poised to become the primary source of retirement income for many future retirees.

Drawdowns are estimated to rise from around 2.4 per cent of GDP in 2022–23 to 5.6 per cent of GDP in 2062–63.

Prior consumer research by the FSC, too, has recorded strong support for an objective that focuses on delivering income in retirement.

According to Briggs, Australians “share a strong belief that the superannuation system should be designed with a singular focus on their retirement.”

“Despite there not being a legislated objective of superannuation to date, Australians know what their superannuation is for and do not believe legislating an objective should open the door to political objectives, such as investing in nation-building infrastructure,” he added.

Upon introducing the bill in Parliament, Minister for Financial Services Stephen Jones had outlined that an agreed objective of super would “serve as a guide for future governments, regulators, industry, and the wider community” and instil greater confidence in the system.

“The last decade saw the former government raid the superannuation system for its own purposes with a devastating impact on the savings of millions of Australians. Legislating an objective of super will help prevent this happening again,” he said.

“In the future, any proposed changes to super legislation will be judged against the objective. This will make policymakers more accountable when considering changes that affect Australians’ retirement savings.”