Boosting superannuation savings

The Government's superannuation reforms will help Australians achieve a better standard of living in retirement by increasing superannuation savings through larger contributions and reduced fees and charges.

Increasing Superannuation Contributions

Around 8.4 million workers will benefit from the Government's historic decision to gradually increase the Superannuation Guarantee (SG) rate from 9 to 12 per cent from 1 July 2013 to 1 July 2019. This reform will increase the pool of national superannuation savings by more than $500 billion by 2037, and will significantly increase future retirement incomes for millions of workers. For example, a person aged 30 today on average full-time earnings will retire at age 67 with an extra $127,000 in superannuation savings.

From 1 July 2013, the Government will also abolish the maximum age limit for the SG. This will increase the incentive for workers aged 70 and over to remain in the workforce and further boost their super savings.

The Government is also simplifying the design and administration of the higher concessional contributions cap, by providing a $35,000 cap to anyone who meets certain age requirements. It is important for those who have not had the benefit of the SG for all of their working lives to be able to contribute more to their superannuation as they approach retirement. The start date for the higher cap will be brought forward to 1 July 2013 for those aged 60 and over, with those aged 50 and over able to access the higher cap from 1 July 2014.

A More Efficient Superannuation System

The Government is also implementing reforms to remove unnecessary costs and reduce fees and charges, which will further boost retirement savings. The introduction of MySuper - a simple, low cost superannuation product - together with the introduction of the SuperStream reforms to streamline the processing of transactions, will help put downward pressure on superannuation fees. Allowing superannuation funds to use tax file numbers (TFNs) to identify and consolidate members' superannuation accounts will also help reduce the number of lost and unnecessary super accounts and further reduce fees.

People will be able to keep better track of their super and consolidate their accounts via SuperSeeker, a secure online service administered by the ATO.

Projected increase (in 2013 dollars) in benefits at retirement from the Superannuation Guarantee increase