Responding to the Institute’s claims that increasing the superannuation guarantee from 9.5 per cent to 12 per cent will only benefit the wealthy, the Association of Superannuation Funds Australia (ASFA) defended the superannuation system and plans to increase the guarantee.
CEO Dr Martin Fahy said on Monday: “This is just another contrived assault by Grattan on our world leading superannuation system.
“The fact is that the system is delivering significant increases in retirement living standards for all Australians, including low income earners.”
He argued that even an extra few thousand dollars could allow retirees to make home repairs, visit the dentist and pay for the heating and cooling of their homes.
Continuing, he pointed to ASFA modelling which predicts that increasing the super guarantee to 12 per cent will mean the proportion of Australians enjoying a comfortable retirement will double to 50 per cent.
ASFA was the subject of scrutiny over the definition of “comfortable” used in its retirement savings benchmark.
Nevertheless, Mr Fahy stood by the broader super system, arguing it is a “unique social policy achievement”.
“Grattan clearly doesn’t care about the adequacy of people’s retirement incomes or their quality of life in retirement — they are condemning retirees to be sicker, poorer and older for longer.
“Impoverishing retirees is no way to deal with the challenges they face, such as funding rising health and aged care costs. Ignoring these problems won’t make them go away.”
He said the researchers’ claims amounted to “stoking intergenerational tensions” while ignoring the challenges posed by an ageing population.
ASFA, which is the voice of the $2.6 trillion superannuation industry, argued that Grattan’s findings were “self-serving”.
“They do not not take into account the additional capital available to retirees in the form of superannuation savings, which increase income levels and generate higher living standards,” the group contended.
Mr Fahy continued: “Grattan selectively considers the interaction of superannuation and the age pension for a very narrow cohort to covertly justify the diminishment of superannuation.
“The reality is that having more private savings, for all cohorts, results in better retirement outcomes.”