Published 17 Oct 2014
Some people are so confused about the super system that they may be afraid to retire, industry organisations have warned, which could lead to a rise in superannuation disputes in the future.
The heads of the Financial Services Council (FSC) and Industry Super Australia (ISA) both agreed on Wednesday (October 14) that individuals are finding it difficult to understand their superannuation needs and were opting to remain employed.
John Brogden, chief executive of the FSC, and ISA boss David Whiteley claimed independent research by the two organisations showed people were becoming "increasingly nervous" as they approach the retirement age. The pair were speaking at the National Press Club and told delegates that constant changes to superannuation are creating problems, the Sydney Morning Herald reports.
"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 Brogden stated.
"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."
Jeremy Cooper, former deputy chairman of the Australian Securities and Investments Commission, echoed Mr Brogden's comments, adding that more transparency is needed from the federal government.
Mr Cooper chaired the Super Review System in 2010, which analysed the government's efficiency, structure, operation and governance of the superannuation system. He argued that more people must be told how much an adequate retirement income will be.
"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," Mr Cooper explained.
"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."
Superannuation disputes set to climb?
Recent FSC research showed delaying the rise in the Superannuation Guarantee by seven years could have a significant effect on working Australians.
The charge will not increase to 12 per cent until 2025 under the Abbott government, which the FSC claimed will cost the public $128 billion in savings.
Mr Brogden said the country already has a savings gap of $727 billion and shelving proposed rises to the super guarantee will only make this worse.
"Australians are living longer and need to plan for their retirement with certainty," he explained.
Anyone confused about their super entitlements should seek legal advice as soon as possible or they could risk losing out on money they are owed. Please contact a superannuation dispute lawyer today for more information and guidance.