Australian Retirement Trust CEO Bernard Reilly today backed calls by ASFA, the superannuation industry’s peak body, for a lifetime contribution cap on superannuation contributions.
At the QUT Business Leaders’ Forum, Mr Reilly said he supported the cap because the purpose of super was to create retirement income.
“It’s not there to amass personal wealth at the expense of others.”
However, he was not ready to commit to the proposed cap of five million dollars.
“It sounds like a lot of money, but if you think about an ageing population, with health care costs and other things, you spend most of it in your last two years, so I wouldn’t want to throw a number out there without giving it a lot of thought,” he said.
Mr Reilly said the $3.4 trillion superannuation industry needed to do a better job in defining the purpose of super.
“‘For me, it’s about generating a pool of assets to generate retirement income for an individual.
“It’s about retirement: otherwise, why is the government giving tax breaks to people saving for their retirement if they’re not using it for that?” he said.
Mr Reilly said when the federal government allowed people to draw down on their superannuation savings during COVID, Sunsuper made $3.4 billion in payment to 383,000 members.
“We need to articulate that super is there for your retirement and you’re not going to access it early because that will be a detriment to you growing your wealth and growing your retirement savings.”
Mr Reilly said it was also a problem that many Australians are not using their super in retirement, with a report from investment house Challenger yesterday revealing around one in four retirees died without touching their super savings.
“It’s about spending that money. We have members who call us worried about the minimum drawdown because they’re eating into their capital, but that’s exactly what they’re supposed to be doing when they’re 75.”
As former CEO of Sunsuper, Mr Reilly oversaw the largest merger in superannuation history in February this year, when Sunsuper merged with QSuper to create Australian Retirement Trust, now the super fund for one in four Queenslanders.
Graham Kerr, Chief Executive Officer of South32, will speak at the next QUT Business Leaders’ Forum on 24 November 2022.
