ISA wants to limit ability of future Govts to freeze the SG
Industry funds want future Governments to be required to publish a “Retirement Income Statement” around any proposed changes to superannuation policy, arguing that such arrangements might have precluded the former Abbott Government’s prolonged freeze of the superannuation guarantee (SG).
Industry Super Australia (ISA) has proposed the Retirement Income Statement in the context of legislating the objective of superannuation arguing that the onus should be on the Government to explain “in a proactive and transparent manner” whether proposed changes will be compatible with the objective.
It said that additional Government accountability mechanisms were needed along with robust modelling and analysis.
“ISA therefore recommends that alongside legislating the objective, there should be a new requirement that the Government publish a statement (“a Retirement Income Statement”) setting out how a proposed superannuation policy change is compatible with the objective, based on modelling and analysis around:
} the short-, medium- and long-term distributional impact of the proposed change on workers’ retirement incomes (i.e., by income and balance quantiles and by gender) – to measure the impact on equity and whether the change supports the delivery of income for a dignified retirement,
} the long-term fiscal impact12 – to measure the impact on sustainability of the system, and
} whether there is any impact on how funds invest – which can measure whether the change has an impact on preservation and the delivery of income for a dignified retirement. The assumptions that are relied upon should be reasonable, defensible and account for the diversity and heterogeneity of individual outcomes, noting this has not always been the case. For example, the Retirement Income Review’s findings were based on overestimated accumulated balances by assuming ‘typical’ accumulations that are incorrect, including:
} assuming all ages and income cohorts salary sacrifice additional superannuation contributions, when the RIR itself concedes “few middle- to lower-income earners make voluntary contributions to their superannuation”; and
} assuming a continuous 40 year working life as an employee with superannuation guarantee receipt that 60 per cent of males and 75 per cent of females will not achieve
“Accordingly, the statement should also clearly set out the assumptions that are relied on for the modelling and analysis. This statement should be made publicly available before the policy change is finalised and introduced into Parliament – for example, as part of a consultation paper on the proposed change or alongside exposure draft legislation,” the submission said.
It said, however, that such a process would not need to be applied to policy changes that were minor or technical in nature.
I love this. Governments should be just as accountable as superannuation providers when it comes to changes to the rules.
They already are, if they do something that people really don’t like, they can get tossed out.
Who is running this country? The union funds or the elected officials? (Union mates)
Next they will be demanding the abolition of all funds other than the (union) Industry Funds = ISA
And that all members must be union affiliated!
Here we are again with Industry Super Funds looking after their own interests and profit margins.Industry Fund lobby groups trying to control the playbook once again. This ‘Çonflict of Interest’ in our countrys super system is a national disgrace.