Objectives of the Alliance for a Fairer Retirement System
The Alliance for a Fairer Retirement System
An important objective for government is to encourage older Australians to save for retirement and to support the majority of retirees (58%) who take pride in being either fully or partly self-funded in retirement. This majority includes many self-funded retirees and almost half of the current 1.1 million SMSF trustees who are either in the pension phase, or who will move into that phase shortly.
The principles held by the Alliance for a Fairer Retirement System include: adequacy, sustainability, certainty and fairness.
Adequacy measures the degree to which the retirement system enables people to achieve a sufficient standard of living in retirement relative either to the standard they enjoyed while working, or as compared to an objective budget standard for retirees. No single retirement income target will be appropriate for all groups.
Sustainability requires that government expenditure on the retirement income system through the age pension and superannuation tax concessions must be affordable over the long term. Changes to retirement income policy must contribute to fiscal sustainability by incentivising self-sufficiency. For many retirees, the potential loss of income under the ALP policy is a direct incentive to sell down assets and seek income support through the age pension. Placing a disincentive on saving for retirement is not good policy and threatens the sustainability of the system.
Older Australians require certainty to plan for retirement with confidence, and should have sufficient time to alter their arrangements in response to proposed policy changes. Short-term thinking completely contravenes the need for policy certainty in retirement planning and creates undue anxiety.
Fairness requires that the retirement system treats people in the same circumstances equally.
We encourage the Government to commission a review of the retirement income system to ensure sound policy is implemented to meet these objectives and principles.