Business

Industry Super Australia says retirement review could impact the viability of the country's wealth system

Industry Super Australia says retirement review could impact the viability of the country's wealth system

The peak industry superannuation body has called for the government to publicly release a report which could affect the amount of money paid into workers’ retirement accounts.

Industry Super Australia (ISA), which represents 15 industry funds, has urged the federal government to make the Retirement Income Review report publicly available, so funds can gauge what impacts may occur to members’ retirement balances.

The report was scheduled to be handed to the government on Friday and will be the first review of Australia’s superannuation system in the past 30 years.

ISA said funds were not provided with a draft of the report and that the review of the sector could be used as a vehicle to unwind policies which underpin the viability of Australia’s near $3 trillion superannuation industry.

ISA — which represents AustralianSuper, Hostplus and Cbus — said the review could unwind the legislated increase in superannuation guarantee payments, which will force employers to pay 12 per cent in contributions to workers instead of the current 9.5 per cent.

According to ISA, eight million Australians would be negatively impacted by the scrapping of the scheduled rise in superannuation contributions made by employers.

“For an average 30-year-old couple working full time, cutting the super guarantee increase would deprive them of up to $200,000 in super by the time they retire,” ISA said.

ISA chief executive Bernie Dean said the review cannot remain hidden and be used as a “secret plan” to change the system without consultation.

“Super is already a great economic leveller for most Australians but we need to do more to avoid us ending up as divided nation, with millions of women and low-income earners scraping by just on the aged pension,” he said.

“The government needs to keep policy stable and stick with the legislated increases in super. That’s the proven and best way to get workers savings and the economy going again.”

The group said keeping the scheduled rise will be imperative in recouping losses caused by account holders draining their balances through the early release of superannuation scheme.

Early release was implemented at the beginning of the pandemic to financially support people who had become unemployed or experienced a reduction in working hours. It allows someone to dip into their accounts and access up to $10,000 in both the 2020 and 2021 financial years.