There are two gaps impacting the Australian superannuation industry — the superannuation savings gap and the gap between the major parties on policy, according to actuarial consultancy, Rice Warner.
In an analysis published on its website this week, Rice Warner has pointed to what it describes as “an alarming divergence” between policy makers regarding a unified and measurable set of long-term objectives for superannuation.
Discussing the superannuation policy gap between the major parties, the analysis cited “the current government’s reluctance to address inequity in superannuation”.
“To highlight how the politics can impact the savings gap, the Superannuation Guarantee rate decision is a good example. We have seen the Savings Gap increasing over time, most recently to $768 billion at 30 June 2014 (up from $727 billion the previous year),” the analysis said.
“The single government policy that had the biggest impact on this movement was the deferral of the increase in the Superannuation Guarantee from 9.5 per cent to 12 per cent by a further four years. This deferral added $118 billion to the gap.”
It said that, similarly, the research showed the impact that deferring retirement would have on the size of the gap.
It said if the current cohort of workers retired at age 62, the size of the gap would be $1,424 billion — almost double the gap at age 67.
“This implies a strong case to increase the preservation age in line with increases in the Age Pension eligibility age, along with further policies to support workforce participation for older employees,” the Rice Warner analysis said.
“Clearly, it serves the national interest for the majority of Australians to be self-sufficient in retirement. If there were bi-partisan agreement to achieve this, we could look to consensus on raising the preservation age and simultaneously seeking to promote work for older Australians.”
