Age Pension, home next cabs off the rank in retirement policy

Assistant Superannuation Minister Jane Hume has slapped down calls to cease reform of the system for the sake of policy stability.

Assistant Superannuation Minister Jane Hume.

Assistant Superannuation Minister Jane Hume, fresh from establishing new laws giving 800,000 workers the right to choose their super fund, has slapped down calls to cease reform of the system for the sake of policy stability.

A day after the government’s bill to override enterprise agreements that railroaded employees into particular, usually industry, super funds passed federal parliament, Senator Hume hinted to a nervous superannuation sector that any further reform would also encompass the Age Pension and voluntary saving arrangements.

“One of things we keep hearing is ‘stop tinkering and making changes’,’’ she told The Australian. “ Well you know what? From the members’ perspective they are seeing improved efficienc­y from these changes.

“I can’t give away too much ahead of the release (of the retirement income review) but one of the things the review focused on was explicitly the interaction between different pillars of the ­retirement system. ‘'

The government is sitting on a landmark review of the retirement income system which industry fears could provide a springboard to delay or stop the legislated increas­e in the superannuation guarantee to 12 per cent scheduled to happen by 2025 — a move support­ed by a growing group of Liberal MPs and business leaders.

Senator Hume, who drew fire from the sector last week after saying she was “ambivalent” about the legislated increase going ahead, said super attracted too much attention compared to the other pillars.

“A good retirement outcome is not driven solely by one’s super balance,’’ she said. “It’s about the other pillars as well: (the) Age Pension and voluntary savings outside of super, including­ the home.

“There are also payments in kind: things like health and aged care, the fact that those things are heavily subsidised matters when we compare our system to those of other countries.”

A well-placed industry source said the sector feared the report would “undermine the raison d’etre of the whole sector”.

“Hardly any of the submissions were about the other two pillars, so who knows what’s coming on that front,” the source told The Australian.

Support for proceeding with the legislated increase in the superannuation guarantee appears­ to have been waning in recent­ weeks, following criticism from board members of large industry funds Hostplus, Australian Super, and Cbus.

Senator Hume said the choice bill, which passed parliament on Tuesday, would free workers from poorly performing funds and reduce­ the proliferation of multipl­e accounts.

UniSuper chief executive Kevin O’Sullivan said earlier this year that UniSuper might need to close its defined benefit fund if the government managed to pass the choice bill. “We said the likelihood of having to close it down would increase”, he told The Australian on Thursday.