With many young Australians facing a sustained period of unemployment due to the economic impact of COVID-19, it is now even more important the superannuation guarantee (SG) is lifted to 12%, a super body believes.
The Association of Superannuation Funds of Australia (ASFA) said the cost at retirement for a typical 25-year-old woman who accessed $20,000 in the early release of super scheme could be as much as $85,000 if she was unable to secure employment and contribute to super for two years.
ASFA deputy chief executive, Glen McCrea, said: “If today’s young people are to avoid ending up on the Age Pension, every single dollar contributed to superannuation counts”.
ASFA noted that around half a million Australians has used the early access to super scheme with the majority being under 35 years old.
“Lifting super to 12% of wages will mean more people in retirement can afford decent aged care. It’s not fair that young people should suffer the devasting impact of COVID-19 now and then also be forced into poverty in retirement by relying solely on the Age Pension – we are better than that,” McCrea said.
Amid a challenging market environment, three super fund CIOs have warned against ‘jumping at shadows’.
The professional body is calling for the annual performance test to transition to a two-metric test, so it better aligns with the overarching duty of super fund trustees to act in the best financial interests of their members.
AustralianSuper, Rest, and HESTA agree on the need to retain and enhance the test, yet they differ in their perspectives on the specific areas that warrant further refinement.
Australia’s second-largest super fund has confirmed it is expanding its presence in the UK following significant investment in the region.
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