FSC supports rise in preservation age: Commission of Audit Report
John Brogden
The Financial Services Council has today supported the Commission of Audit’s recommendation to reduce the gap between the preservation age and Age Pension to five years.
John Brogden, CEO of the FSC said: “We commend the Commission of Audit’s recommendation to tighten the link between superannuation and eligibility for the Age Pension.”
“Many Australians starting work today will live for more than one century. Accessing superannuation at 60 is no longer viable.”
“The retirement savings of Australians are increased by $200 billion for every year the preservation age is increased,” Mr Brogden said.
The FSC has advocated for reforms which ensure the Age Pension and superannuation system meets the needs and expectations of Australians in retirement.
Mr Brogden said: “It is critical that the increased life expectancy of Australians is the driver for Age Pension and superannuation policy, so future generations of taxpayers are not burdened with the cost of our retirement.”
Changes to retirement policy recommended by the FSC include:
- Increasing the superannuation preservation age to 65;
- Tightening eligibility for the Age Pension; and
- Linking the Age Pension to life expectancy.
“The government will have more opportunities for cost savings for the National Disability Insurance Scheme and Disability Support Pension through using the private sector,” Mr Brogden said.
“Fiscal modeling for the FSC by Deloitte Access Economics shows if the government treated private disability insurance in a similar way to private health insurance, $8.5 billion in net savings could be achieved,” Mr Brogden said.
“The FSC has recommended the government considers leveraging the life insurance sector to meet the ballooning costs of disability welfare in Australia to reduce the increasing pressure on the Federal Budget.”
“Life insurance can reduce the long-term public sector costs of the National Disability Insurance Scheme and Disability Support Pension.”
