Towards a self‐funded retirement: will superannuation substitute for the age pension?

Deborah Ralston, Jun Feng

Research output: Contribution to journalArticleResearchpeer-review


The Turnbull Government is legislating a new objective for superannuation as proposed by the recent Financial System Inquiry (FSI)1 "to provide income in retirement to substitute or supplement the Age Pension". This objective is being enshrined in legislation, and will provide a benchmark for the system's performance. The inclusion of the intention to "substitute" for the age pension heralds a new direction for superannuation in Australia, and creates two key challenges for policy: the need to increase the median balances of low and middle-income earners; and better coordination between the three pillars of the retirement system, most especially between superannuation and the age pension.

In this article, the authors examine first how the Australian superannuation system has been shaped by ongoing, and occasionally contradictory, policy changes, often motivated by political or budgetary considerations. Second, issues related to retirement income are discussed, such as the take-up of the age pension, the diversity of super balances on retirement, and the modest level of median balances.
Original languageEnglish
Pages (from-to)607-628
Number of pages22
JournalAustralian Tax Forum
Issue number3
Publication statusPublished - 2017

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