Super tax concessions getting too expensive: Liberal MP

Its chief executive, Eva Scheerlinck, said the report showed that super had been effective in increasing individual retirement savings and reducing reliance on the age pension as a primary source of retirement income.

“Treasury projections suggest that with 12 per cent super by 2025, the median superannuation balance at retirement will increase from around $125,000 in 2020-21 to around $460,000 in 2060-61 in today’s dollars.

“A super balance of this size will have huge impact on the future retirement outcomes of ordinary Australians who will benefit from greater financial security in retirement than the average retiree experiences today.”

The IGR said the maturing super system meant future retirees would be better off than current retirees, with more income available to support their living standards during retirement.

Over the next 40 years, spending on the aged and service pension is projected to fall from about 2.7 per cent of GDP in 2020-21 to 2.1 per cent of GDP in 2060-61, reflecting the maturation of the superannuation system.

As of March, the superannuation system had assets under management valued at about $3 billion or 157 per cent of GDP, which is expected to grow to about 244 per cent of GDP by June 2061.

“Compulsory superannuation has been effective in increasing individual retirement savings and reducing reliance on the age pension as a primary source of retirement income,” the report said.