It’s your chance to have your say on the pension and super system

Dec 21, 2019
Retirees are finally given a place to voice their opinion in this paper but are the right questions being asked? Source: Getty.

The Retirement Income Review’s public consultation paper was published late last month, which allows Australians to have their say on the state of Australia’s retirement income system – all as part of the review taking place.

The approach taken by the paper is to re-iterate the review’s terms of reference, summarise the way in which key aspects of our current retirement system operates and then ask a series of questions the review would like help with. My initial impression from the nature of the questions is that the review is taking on far more than it was specifically tasked with considering.

In some respects, this will let government off the hook as the review takes the heat for answering questions on adequacy or the balance between the state and individuals on securing or providing for their own retirement incomes. The terms of reference make it clear that the work of the review is to “establish a fact base” that presumably can be used to support future policy development. However, the paper suggests the review will delve into far more subjective and challenging areas than simply establishing facts.

In opening up the paper to community consultation, the paper provides 26 consultation questions. However, I would argue that 15 of the 26 consultation questions at the back of the paper have nothing to do with the establishment of facts. For example, in the purpose of the system section, the review asks: “What are the respective roles of the government, the private sector, and individuals in enabling older Australians to achieve adequate retirement income?”

The challenge here is that the nation has not yet decided what is meant by an adequate retirement income. There is therefore no objectively correct response. Facts don’t come into it, and the answers depend on philosophical views, political views and demographics.

I have been asking myself why the review has taken this approach and concluded that the complete lack of context within our retirement income system makes it almost inevitable that anyone considering our system properly must first try to establish some. We currently live in a country where the following questions are moot:

  • What is the purpose of our retirement income system?
  • What is the purpose of each of the three pillars?
  • To what extent should the state take responsibility for securing its citizens’ retirement incomes?
  • What is an adequate retirement income?

These are all big, unanswered questions that deserve broad community level answers. Given the vacuum created by those within the Australian community that should be answering them, the review has stepped up to the plate and looks like it is going to give most of them a go.

I congratulate them on their courage, and will follow with interest the submissions made by the wider community. For those wishing to express their views, the deadline for public submissions is February 3, 2020 and can be made here.

Important information: The information provided on this website is of a general nature and for information purposes only. It does not take into account your objectives, financial situation or needs. It is not financial product advice and must not be relied upon as such. Before making any financial decision you should determine whether the information is appropriate in terms of your particular circumstances and seek advice from an independent licensed financial services professional.

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