The Courier-Mail

Pen­sion will stick around

Fu­ture su­per fails the com­fort test

- AN­THONY KEANE

A MA­JOR­ITY of Aus­tralians will rely on the age pen­sion to help pay for their re­tire­ment, de­spite ris­ing su­per­an­nu­a­tion sav­ings.

A new re­port by the Ac­tu­ar­ies In­sti­tute and Rice Warner fore­casts the re­tire­ment in­comes of more than half of to­day’s 30-year-olds will com­prise at least one-third age pen­sion pay­ments.

It says many wealth­ier re­tirees will con­tinue to re­ceive some pen­sion but warns that Mid­dle Aus­tralia is at risk of get­ting squeezed.

Younger Aus­tralians who worry about the pen­sion dis­ap­pear­ing decades from now shouldn’t lose sleep. Ac­tu­ar­ies In­sti­tute chief ex­ec­u­tive David Bell said it would re­main a “very sig­nif­i­cant pro­por­tion” of peo­ple’s re­tire­ment in­comes in the fu­ture. “Eighty-five per cent of peo­ple over 65 to­day are on a full or part pen­sion – that’s only likely to be down to about 75 per cent in 30 or 40 years,” he said.

The in­sti­tute’s For Richer, For Poorer re­port says su­per will fund a big- ger pro­por­tion of fu­ture re­tire­ment in­comes, but the re­duced cost to the gov­ern­ment will be off­set by a greater num­ber of re­tirees who will live for longer. “While the su­per sys­tem is work­ing well gen­er­ally, it will not de­liver com­fort­able re­tire­ments for all groups,” Mr Bell said, sin­gling out sin­gle women as those likely to ex­pe­ri­ence the low­est in­comes.

As­so­ci­a­tion of Su­per­an­nu­a­tion Funds of Aus­tralia chief ex­ec­u­tive Pauline Vamos (pic­tured) said the age pen­sion was sus­tain­able. “Aus­tralia’s cost of de­liv­er­ing the age pen­sion is less than 4 per cent of GDP,” Ms Vamos said. “When you look at other Western coun­tries, their pen­sion costs are up to dou­ble-digit fig­ures.”

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