The Australian Institute of Superannuation Trustees (AIST) has outlined 20 recommendations ahead of the Budget on improvements for the superannuation system.
These included measures around the Super Guarantee (SG), self-employed workers, the Retirement Income Covenant (RIC) and tax concessions.
The submission was broken down into three parts: fairness and equity, adequacy, and transparency.
“Recommendations to enhance the ability of the system to generate strong retirement outcomes for Australians include expanding the right to SG contributions for all workers, passing the legislation to scrap the minimum monthly salary threshold of $450, and ensuring that super contributions are payable on paid parental leave,” it said.
Regarding the SG, AIST said timetable for the increase from 10% to 12% should be maintained and action should be taken against those for SG non-compliance.
“Lifting the SG rate to 12% is fundamental to ensuring that everyone – regardless of their gender or income level – can maintain their living standards in retirement. This is particularly important for people on low incomes, those working part-time or those who have taken time out of paid work as carers.”
The Government should also progress the promise to abolish the $450 per month income threshold for the SG to improve fairness and reduce incentives to casualisation of the workforce and pay the SG during paid parental leave.
AIST also gave suggestion for how the Your Future, Your Super performance test could be expanded and amended in the future.
“The expanded tool should encompass all APRA-regulated superannuation products in both the accumulation and retirement phases, regardless of size, eligibility and whether or not the product is open to new members.
“This should include pre-mixed options, single-class options and options delivered through a member-directed investment ‘platform’. The tool could be split into different comparison options so accumulation would not be compared with a retirement phase product.”
And remove the transfer balance cap debacle and simply install an income tax threshold for self
funded retirees. Eg 50k above that the marginal system kicks in.