A new Challenger white paper suggests the superannuation system is broadly effective and delivering objectives for retirees - but it is still leaving some members behind.
Citing APRA figures, members aged 65 and over have $800 billion tucked away in superannuation accounts.
Members in a not-for-profit fund tend to retire with $305,000 on average, which is nearly 20% higher than a retail fund member with $255,000.
"Members across a wide range of funds have retirement savings that can support a more desirable lifestyle in retirement than has previously been achievable," Challenger wrote in its Retirement Income Research paper.
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How super balances interact with the Age Pension assets test is important for retirees as the average, large APRA fund member in retirement phase is not eligible for the full Age Pension, Challenger said.
"Single retirees with balances over $160,000 would not be on a full Age Pension, due to the impact of the means test on the income deemed to be earned from their super. For those with balances above $258,500, the harsher assets test kicks in with the 7.8% per annum taper rate."
In 2018, only 42% of age eligible retirees were on the full Age Pension - this includes retirees in their 90s who have never had super during their working lives. Challenger pointed out that the tide is turning as recent retirees are less likely to rely on the full Age Pension.
On the other hand super is not working perfectly for everyone, Challenger said, noting that those not working in stable, full-time employment tend to end up with poorer outcomes in retirement.
Challenger suggests removing the $450 a month threshold for Superannuation Guarantee payments; paying SG on parental leave; and extending SG to the self-employed and gig economy workers are some solutions that could help fix the system.