Thursday, 3 April 2014     

The Government needs to increase annual concessional contribution caps for those nearing retirement, says the Institute of Public Accountants (IPA).

The IPA believes that the annual concessional contribution cap for those aged between 50 and 60 years should be raised to $50,000, and to $75,000 per annum for those aged over 60 years. Currently concessional contributions are capped at $25,000 (or $35,000 for certain members).

"By increasing concessional contribution caps for those aged over 50 years it would allow them to make more adequate preparations for retirement in their final years of employment," said IPA chief executive officer, Andrew Conway.

According to the Australian Bureau of Statistics, the current median superannuation balances of Australians in the 55 to 64 year age bracket for males is just $90,000, and $60,000 for females.

"Whilst in the short term increasing the concessional contribution caps may be a cost to the government, it will help to increase Australians' superannuation balances and therefore reduce the number of people reliant on government benefits in the future. 

"Increasing the concessional contribution caps will also help women who take time out of the workforce to raise families.

"With women on average having lower superannuation balances than males of the same age (other than those in the youngest age bracket), it becomes even more critical that we provide them with the opportunity and means to increase their superannuation balances as they prepare for retirement." said Mr Conway.