Retirees request retirement income review guarantee

By Grace Ormsby

October 02 2019
Share

The Association of Independent Retirees (AIR) is seeking confirmation that the government review into retirement income will not seek to make changes to legislation that might have a detrimental impact on already-retired or well-prepared Australians.

Retirees request retirement income review guarantee

In a statement released earlier this week, the AIR said it is particularly concerned that retirees who set their retirement investments in place prior to their leaving of the workforce could be subjected to changes that would adversely affect their retirement income.

The review aims to consider the current state of the retirement income system and how it will perform in the future, and will look at the “three pillars” that are at play: the Aged Pension, compulsory superannuation, and voluntary savings or investments.

A three-person panel will consider how the retirement income supports retired Australians, the role of each “pillar”, the distributional impacts across the population and over time of such a system, as well as the impact of current policy setting on public finances.

While welcoming the review, AIR director Terry O’Callaghan commented that “changing the ‘goal posts’ on legislative arrangements for Australians who have already retired and are partly or fully self-funding their retirement, should not be an option for the review”.

AIR said it is seeking assurance from the government that today’s retirees won’t be perversely affected by the review, because “retirees need certainty in planning for their retirement”, Mr O’Callaghan considered.

“Members of AIR look forward to the review independent panel considering ways of improving the efficiency and competitiveness of superannuation and encouraging a greater percentage of the working population to partly or fully fund their retirement,” the director continued.

According to the association, the outcomes from the review need to ensure that sufficient incentives apply to encourage more Australians to provide for their retirement through superannuation and private savings to assist in reducing the pressure on the federal budget.

It has also expressed an enthusiasm to raise a number of issues with the review’s panellists for inclusion in the final report.

These include:

Retirees having an adequate level of income that provides for at least the standard of living experienced prior to retirement
Retention of investment incentives that are considered fair, including superannuation concessions, franking credits on Australian equities, negative gearing on investment properties, and the current 50 per cent discount on capital gains tax
Allowing workers who were self-employed or have no superannuation to sell privately held assets exempt of capital gains tax up to a defined cap, and purchase a tax-free retirement income stream product
Improving information that assists retirees with benchmarking their superannuation’s performance and private investment yield
Providing assistance with provision of alternative low-risk investment opportunities in times of low fixed interest, as is currently the climate
A broadening of the current age-based percentage drawdowns for account-based income stream pensions with a broadening of the age ranges, as well as a lowering of the minimum drawdown percentages once a retiree has reached 75 years of age
Making an adjustment to deeming rules to better relate to a low investment environment

“Any new legislation concerning the three pillars of Australia’s retirement income system resulting from the review should be based on fairness, transparency and certainty,” Mr O’Callaghan concluded.

About the author

Grace Ormsby

Grace is a journalist on Momentum Media's nestegg. She enjoys being able to provide easy to digest information and practical tips for Australians with regard to their wealth, as well as having a platform on which to engage leading experts and commentators and leverage their insight.

About the author

Grace Ormsby

Grace is a journalist on Momentum Media's nestegg. She enjoys being able to provide easy to digest information and practical tips for Australians with regard to their wealth, as well as having a platform on which to engage leading experts and commentators and leverage their insight.

sections

most read

sections

most read

sections

most read

sections

most read

sections

most read

sections

most read

sections

most read

Most read

Age Pension increase prompts Australians to review their finances

Latest Podcast

Superannuation guarantee rate rises to 12 per cent as parental leave changes ...

Resources

There is $17.5 billion in lost and unclaimed super across ...

Retirement