Treasury has released the Final Report of the Retirement Income Review.

The review focused on establishing a fact base of the current retirement income system. The review was not asked to make recommendations or propose changes to policy settings.

The terms of reference for the review referred to a three-pillar retirement income system consisting of a means-tested Age Pension,  Compulsory superannuation, and voluntary savings, including home ownership.

The observations include:

• The Australian retirement income system is effective, sound and its costs are broadly sustainable. But the evidence suggests there are areas where the system can be improved.
• The retirement income system is complex. There is a need to improve understanding of the system. Complexity, misconceptions, and low financial literacy have resulted in people not adequately planning
  for their retirement or making the most of their assets when in retirement. Adding to the complexity is the interaction with other systems, such as the aged care and the tax systems.
• A clear objective for the system, agreed by the Australian community through the Government, is needed to guide policy, improve understanding and provide a framework for assessing the performance of the system.

The review considered the changing nature of retirement, the role of the aged pension, compulsory superannuation, and the family home.

The Treasurer said the Government will consider the observations made in the Review together with the findings of related reviews including the Aged Care Royal Commission and remaining recommendations of the Productivity Commission’s report into Superannuation.

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Author: David Jacobson
Principal, Bright Corporate Law
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The information contained in this article is not legal advice. It is not to be relied upon as a full statement of the law. You should seek professional advice for your specific needs and circumstances before acting or relying on any of the content.