Communiqué of Principles for Superannuation

Senator Nick Sherry, Minister for Superannuation and Corporate Law and a coalition of peak superannuation industry bodies have today released a groundbreaking Communiqué of Principles on the Australian superannuation system, including a resolution that the current operational features of our system be examined.

"Australia has a world leading, compulsory superannuation system with some $1.1 trillion under management on behalf of hard working Australians."

"After nearly 20 years of compulsory superannuation and the development of numerous new features, the Government, with the support of industry, has agreed that it is timely and appropriate that an examination take place."

"This landmark process will examine the structure, operation and efficiency of the superannuation system."

"All parts of the superannuation sector have come on board – this is a mature decision by all concerned and will assist in maintaining community confidence in our world-class system."

"It is important to note that the Government has no predetermined views on the outcome of the examination."

The Terms of Reference and details of the structure of the examination will be released shortly.

28 April 2009
CANBERRA

Communiqué of Principles

Compulsory superannuation is of immense benefit to the Australian community and economy and it is critical that Government and industry work to ensure public confidence in the system remains strong.

With a total level of savings in the superannuation system amounting to more than $1 trillion, projected to rise to $2.5 trillion by 2015 and with the system uniquely underwritten by compulsory and voluntary contributions of $70 billion a year, the Government has an important duty of care to ensure the system operates in the best interests of its members.

Compulsory superannuation forms, and should remain, one of the three critical pillars of our retirement incomes system, along with voluntary savings and the age pension.

The core elements of the Australian superannuation system are strong and well regulated.

Strong retirement outcomes for Australians are the pre-eminent consideration of our superannuation system.

Whilst the superannuation system is united by these common features, it also benefits from its structural diversity and the ability of Australians to make key personal decisions about their own superannuation.

After 20 years of compulsory superannuation and the development of numerous new features, often developed without systemic analysis, it is timely to ensure our system continues to operate with efficiency and sustainability.

As such, and with these Principles in mind, we agree that it is prudent that the current operational features of our superannuation system be examined.

We further agree that such an examination be conducted across the system as a whole and complement the work underway by the Australian Future Tax System review.

It is critical that any outcomes of such an examination be the subject of appropriate transitional arrangements, are prospective with appropriate grandfathering and include transition periods relevant to prevailing market conditions.