The heads of Australia's biggest superannuation lobby groups showed a rare common ground to warn that people are so perplexed by constant changes to the rules governing super that they are afraid to retire.
Subscribe now for unlimited access.
$0/
(min cost $0)
or signup to continue reading
The Financial Services Council and Industry Super Australia on Wednesday revealed their research showed the same trend: that people found it so difficult to assess their superannuation requirements they were staying in the workforce.
At the same time, the author of the sweeping 2010 review of the $1.9 trillion retirement savings industry, Jeremy Cooper, made a similar entreaty for change.
He called on Financial System Inquiry chair David Murray to push the federal government for more transparency about its plans for policy areas - such as pensions, taxation and health - that will affect the level and type of retirement savings individuals need.
John Brogden, chief executive of the FSC, and the head of ISA, David Whiteley, said at the National Press Club on Wednesday that surveys are telling them people approaching retirement age are becoming ''increasingly nervous'' about the future shape of the super system, and that constant changes to the system are doing ''nobody any favours''.
That is despite a pre-election commitment by the former Labor government and the Coalition government not to make any new changes to super for at least three years.
''We've got an intergenerational report, it comes out every five or so years, that should set the policy changes for superannuation and that is left alone for five years, warts and all,'' Mr Brogden said.
''There will always be something that could be improved, but people need confidence [that for] at least five years the policy direction won't change.''
Mr Cooper said the federal government needed to begin explaining what an ''adequate retirement income'' actually looked like.
''The Financial System Inquiry has generated a lot of discussion about the need to ensure Australians have adequate retirement income, but for the conversation to be constructive there needs to be a much sharper focus on what that means,'' said Mr Cooper, who is now chairman of retirement incomes at Challenger Financial Services.
''The industry and the public are expected to save and plan adequately for a self-funded retirement without answers to key questions around what are the minimum safety net provisions the country will provide,'' he said.
Mr Cooper predicted that in the coming decades, pension and superannuation schemes will become more integrated with the health and aged care systems.
''It needs to happen. However, that will be a very heavy piece of policy-lifting to do,'' Mr Cooper said.
Financial Planning Association chief executive Mark Rantall backed Mr Cooper's call for more clarity on the scope of what individuals will be expected to self-fund in their retirement.
''It would be great if the Murray report came out and said exactly what the goal of super is supposed to be,'' Mr Rantall said.
Mr Cooper said the rules around lump sum payments at retirement were a ''key issue'' for Australia to address is.
Dimensional head of international portfolio management Graham Lennon changes to the rules governing superannuation needed to give people enough time to adjust any existing plans they had in place for their savings.
''It is very difficult to deliver people investment advice for their retirement when in all likelihood the relevant government policies will change.''
Mr Lennon also said he wanted reforms to how superannuation fund balances were reported to members.
''People receive letters telling them what their super account balance is, but what would be much more relevant is if they knew what level of income that balance would provide them in retirement,'' Mr Lennon said.
