question is how do we live with dignity? How do we ensure that we have good quality of life the whole way through? This is the conversation we are going to be having with the Australian people over the next few months. The problem of ageing Australia was acknowledged by the current Treasurer, The Hon Scott Morrison MP, in last year’s Budget, when he announced that the age-based restrictions applying to those aged 65-74 would be removed. However, this announced measure met a premature end when the Treasurer (along with the Minister for Revenue and Financial Services, The Hon Kelly O’Dwyer MP) announced that the harmonisation of contribution rules for those aged 65 to 74 would not proceed. We are of the increasing problems that longevity risk is creating, notably with regards to Australians’ retirement savings. We further note research findings, such as AIST’s research with the Australian Centre for Financial Studies, where it was found that lower income Australians were more likely to retire sooner than professionals, placing additional strain upon low retirement savings and social security. As Australians live longer, the justifications for age-based restrictions on contributing into superannuation are disappearing, and we can no longer support the restrictions. The opportunity to top up one’s superannuation may not be present during the window of one’s working life, which for some Australians extends well past age 75 anyway. Other developed countries are (as is Australia) actively encouraging people to stay at work longer where they are able to do so and – the superannuation system needs to back up this policy. Age-based restrictions also add complexity and red tape to the system. In accepting contributions, a trustee must be mindful of whether a member is in a position to make a contribution, based upon their age. And although age-based restrictions on SG contributions ended in 2013, we note that there remain a plethora of regulations making it difficult or even impossible, for older working Australians to contribute to their retirement savings. The following is a list of some age-based restrictions presently in force with regards to contributions into superannuation: A work test (of gainful employment on at a part-time basis) must be satisfied from the age of 65, if a member is making a personal contribution; If a member is making a contribution on behalf of an eligible spouse, the eligible spouse must satisfy the work test from age 65 onwards;
question is how do we live with dignity? How do we ensure that we have good quality of life the whole way through? This is the conversation we are going to be having with the Australian people over the next few months. The problem of ageing Australia was acknowledged by the current Treasurer, The Hon Scott Morrison MP, in last year’s Budget, when he announced that the age-based restrictions applying to those aged 65-74 would be removed. However, this announced measure met a premature end when the Treasurer (along with the Minister for Revenue and Financial Services, The Hon Kelly O’Dwyer MP) announced that the harmonisation of contribution rules for those aged 65 to 74 would not proceed. We are of the increasing problems that longevity risk is creating, notably with regards to Australians’ retirement savings. We further note research findings, such as AIST’s research with the Australian Centre for Financial Studies, where it was found that lower income Australians were more likely to retire sooner than professionals, placing additional strain upon low retirement savings and social security. As Australians live longer, the justifications for age-based restrictions on contributing into superannuation are disappearing, and we can no longer support the restrictions. The opportunity to top up one’s superannuation may not be present during the window of one’s working life, which for some Australians extends well past age 75 anyway. Other developed countries are (as is Australia) actively encouraging people to stay at work longer where they are able to do so – and the superannuation system needs to back up this policy. Age-based restrictions also add complexity and red tape to the system. In accepting contributions, a trustee must be mindful of whether a member is in a position to make a contribution, based upon their age. And although age-based restrictions on SG contributions ended in 2013, we note that there remain a plethora of regulations making it difficult or even impossible, for older working Australians to contribute to their retirement savings. The following is a list of some age-based restrictions presently in force with regards to contributions into superannuation: A work test (of gainful employment on at a part-time basis) must be satisfied from the age of 65, if a member is making a personal contribution; If a member is making a contribution on behalf of an eligible spouse, the eligible spouse must satisfy the work test from age 65 onwards;
C2016-052_Australian-Institute-of-Superannuation-Trustees.docx