What's in the Budget for superannuation and retirement savings?

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on March 30, 2022 Fact Checked
What's in the Budget for superannuation and retirement savings?

There were "no major changes" to superannuation in the Federal Budget - but why is this a good thing?

The 50% reduction in the minimum superannuation drawdown was extended for another 12-months in the Federal Budget 2022-23.

Originally introduced in March 2020 - at the beginning of the pandemic - the extension means that retirees won't be forced to withdraw their super at the previous minimum rates in place.

National Seniors Australia Chief Advocate Ian Henschke said this will help ease worry for pensioners in "uncertain times".

"Many older Australians don’t understand why they’re forced to withdraw set amounts of savings from superannuation," Mr Henschke said.

"They worry this will erode their nest egg and therefore their income later in life, when they face unknown medical and aged care costs."

The Association of Superannuation Funds of Australia (AFSA) said the Budget delivered "welcome stability" to the superannuation industry.

ASFA CEO Dr Martin Fahy said this will contribute to better long-term retirement outcomes and enable customers to plan for retirement with confidence.

"ASFA recently conducted research which found that consumers were unequivocal in their desire to save more for their retirement and this Budget will allow them to do just that," Dr Fahy said.

"The stability in superannuation policy settings in tonight’s Budget is recognition that the superannuation system is effective, sound and sustainable. It is well-placed to deal with economic uncertainty and the challenge of an ageing society.

"Combined with the legislated move to 12%, more Australians are now on track to be self-funded in their retirement and the fiscal burden of the Age Pension will continue to be among the lowest of our OECD peers."

No news is good news, but is that enough?

While the changes - or lack thereof - have been praised by some retirement savings experts, Actuaries Institute said there's still more work to be done.

Actuaries Institute Chief Executive Elayne Grace said implementing a more robust and effective retirement income system that better links public and private sectors should be central to the government's long-term agenda.

"This is crucial for the wellbeing of all Australians," Ms Grace said.

"The objective of the retirement system must be to provide for retirees so that they have a reliable, secure and adequate income to live with dignity in retirement."

Ms Grace said that super and retirement settings have been subject to frequent and significant changes for many years.

"A period of consolidation to implement the already significant reforms underway, including the ongoing adaptation to the Your Future, Your Super changes (especially the 'performance test') and introduction of the retirement income covenant from 1 July 2022 is welcomed," she said.


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Rachel is a Finance Journalist, and joined Savings in 2021. Coming from a background in the FinTech space, her interests include the innovation of lending technology, property, investing, and more. With a passion for educating and informing people about their finances, she hopes to increase the financial literacy of everyday Australians.

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