Posted in: Insights

07/11/2011

The federal government's decision to abolish the age cap on superannuation guarantee contributions has been warmly welcomed by one industry association.

Commenting last week after the announcement that the superannuation guarantee (SG) age limit - which is currently set at 69 - will be lifted altogether, the Self Managed Super Fund Professionals Association (SPAA) said it goes a long way to supporting retirees as they move out of full-time employment.

SPAA chief executive Andrea Slattery said: "SPAA congratulates the government on the SG age limit measure as it will allow more senior Australians the opportunity to save for retirement, particularly as many of them transition to part-time and casual work."

She added that while lifting the age restrictions is a good step towards offering more support to Australians in their retirement, other superannuation issues should also be considered by the federal government.

These include, she said, "raising the annual concessional superannuation caps and finding a resolution to the excess contributions tax problem so confidence and certainty in the superannuation system can be restored."

However, Slattery was supportive of the government's move to raise the superannuation guarantee from nine per cent to 12 per cent under the Superannuation Guarantee (Administration) Amendment Bill 2011.

If the legislation goes ahead, the superannuation guarantee will increase between 2013 and 2020.

The increase, which has been championed by superannuation minister Bill Shorten, could see an additional $500 billion in the nation's collective super balance by 2035.

Shorten explained on November 2 that the boost of funds is a historic reform that could prevent Australians from a scenario in which they "work hard and retire poor".

In a statement released alongside the announcement, the treasury estimated that a 30-year-old individual making $70,000 a year could take home an additional $108,000 in retirement under the new reforms.