Not So Super

In Hinch Says yesterday I concentrated mainly on the pension changes and the government’s Budget plan to increase your retirement age to 67. I called it the pushmi-pullyu Budget because they were also cracking down hard on people trying to re-build their super funds so they can become self-funded retirees. I also said: One thing that has largely gone unnoticed is the recommendation to increase the age at which you can redeem what super you have to 67.

I’m glad to see The Age has put that issue on Page One today under the headline ‘Push to Lock Up Super Until Age 67’. And it says the plan could be even more controversial than the Budget decision to lift the pension age.  And that’s right.

David Knox from Mercer Consulting –who proposed the 67 pension age in a paper for the Committee for Economic Development—is dismayed by the attack on super.

He says: ‘The superannuation access age should be generally about five years younger than the pension age in order to provide flexibility. You cannot  assume that everyone will retire at the same age. In fact today most people retire before 65.’

It’s a frightening scenario. Imagine this. You’ve diligently put money into compulsory super and you decide to retiree at 62. You’re not going to be a burden on the taxpayer. Not going to claim a pension. You’re going to live off your super. But then the Government says ‘Hang on a flash. You can’t access that money for another five years’. What the hell are you supposed to do?  What are you going to live on for five years until you qualify for a pension? Or they let you get your hands on your own money!

Of course the politicians who make these rules for you won’t face that dilemma. They have their own taxpayer-funded, bullet-proof, super scheme. And if they signed up before 2004, before the minimal Latham changes, there is no age restriction. Could qualify at 40 or 50.

A backbencher walks away with an annual pension of about $63,000 a year. And it’s indexed.

If Prime Minister Rudd quit today he’d get more than $160,000 a year for life. He could take a lump sum of more than three quarters of a million dollars and still collect more than $80,000 a year. If Wayne Swan retired today he’d get more than $100,000 a year for the rest of his life.

Didn’t hear those figures being mentioned when the fiscal fiends were urging us all to share the pain, sacrifice for the greater good, take a hit for your country.

All of us. Except them. Of course.

Thursday May 14, 2009

© Copyright Derryn Hinch 2009