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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