Seniors opposed to super changes

8 March 2013

| By Staff |

Most older Australians (59-plus) want the Government to leave super alone - not just to stop tax tinkering but in terms of restrictions on lump sum withdrawals and increasing the preservation age - a National Seniors survey has found.

Naitonal Seniors said 86 per cent of respondents objected to the Government making any more changes to super, although 70 per cent were not confident the rules would remain the same until they retired.

National Seniors chief executive Michael O'Neill said the survey rebutted the idea that people blew their retirement savings, as over 85 per cent said they would not take super as a lump sum although only just over half objected to restricting access.

A little under 40 per cent intended to or did take a combined lump sum and income stream, while 26 per cent planned or did rely purely on an income stream.

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Of the 14.3 per cent who intended to take super as a lump sum, 29.3 per cent said they would re-invest while 26.3 per cent planned to pay off their mortgage, the survey found.

O'Neill said it was unfair to change the rules on people who made voluntary contributions by foregoing other things, such as paying off the mortgage or going on holidays. He said changes were not happening within a wider retirement income strategy.

Actuarial reports have shown that people now live longer, but 64 per cent of respondents were opposed to raising the preservation age.

Although the Financial Services Council's Bond reports show discretionary contributions were in decline for a year until the last December quarter, 90 per cent of respondents said they did make voluntary contributions. The majority who did not said they had no money to spare or made alternative investments.

The Actuarial Institute released a white paper last November that advocated increasing the preservation age and restricting access to taking super as a lump sum. ASFA chair Tony Lally has also said the Government needed to tackle the rules around retirement, including determining an amount people could withdraw as a lump sum in retirement.

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