The changes to the rules for voluntary super contributions in the 2019 Federal Budget are good news for older members who can afford to make additional contributions to their superannuation savings, however they will have minimal impact on the retirement outcomes of most Australians, the Australian Institute of Superannuation Trustees (AIST) said tonight.
“The vast majority of members of profit-to-member superannuation funds will not benefit from these changes. Most ordinary working Australians cannot afford to make extra contributions and can only dream of having the money to pour an extra $300,000 into their super fund in a single year,” said AIST CEO Eva Scheerlinck.
Ms Scheerlinck noted analysis by Rice Warner for Women in Super indicated that less than one in four older workers made voluntary contributions and, even then, the average contribution was around $7000.
Under the changes, older members aged under 67 will be able to will be able to make non-concessional contributions of up to $300,000 in a single year. These members will also be able to make voluntary concessional and non-concessional super contributions, without meeting the work test.
Older members will also be able to continue to make contributions on behalf of their spouse until age 74, up from age 69.
“This budget is a missed opportunity to improve retirement outcomes for low income workers and the many women with broken work patterns who still retire with around half the super of men.”
The Government also announced additional funding for ASIC and APRA, as well as funding for a new, independent oversight authority which will be responsible for monitoring the regulators. This was recommended by Commissioner Hayne as part of the recent Royal Commission.
“ASIC and APRA have their work cut out for them dealing with dozens of referrals from Commissioner Hayne, including investigations into several bank-owned and other retail superannuation funds,” Ms Sheerlinck said.
“These additional funding commitments will help ensure they complete this important work as swiftly as possible.”
However, Ms Scheerlinck raised concerns about who foots the regulator’s bill, noting that the budget papers stated that industry would contribute to the additional funding through the ASIC industry funding model and increases in APRA levies.
“Profit-to-member super funds were thoroughly examined by the Hayne Royal Commission and unlike the banks, received a relatively clean bill of health. Their members should not be forced to pay for ASIC and APRA to investigate misconduct by banks and bank-owned superannuation funds,” Ms Scheerlinck said.
