It’s time to fix the major issues


The Australian taxation system for superannuation is one of the most complex tax systems for pensions anywhere in the world. It is costly to administer, hard to understand, unfair and accentuates the gender super gap. In addition, the constant tinkering in federal budgets over the last 20 years has not engendered community confidence in superannuation for the long term.


It’s time to fix the major issues to make it a fairer system for all Australians.



Superannuation Tax Concessions

Making super tax concessions work for lower-income earners, women and the budget



Our latest paper recognises these issues and recommends changes to improve the system in a cost-neutral manner, whilst also noting the primary purpose of superannuation and the findings of the recent Retirement Income Review.





Recommendations for change


A $4,200 government superannuation contribution to all primary carers following the birth of a child


Provide a concession of 15-20% on all concessional contributions, subject to current annual limits


Apply a tax rate of 15% (10% on realised capital gains) on all investment income received by superannuation funds


Require all accumulated benefits to be gradually withdrawn during retirement, providing tax-free income

Super baby bonus to close the gender super gap



On average, women spend fewer years in the paid workforce, are more likely to have part-time jobs and, even when in full time roles, have lower average salaries than men. Yet, they are also likely to spend more years in retirement due to their higher life expectancy.


A recommendation to close the gender gap and accelerate gender parity is the introduction of a carer’s superannuation credit of $4,200, paid irrespective of the income of the primary carer or if, and when, the primary carer returned to work. The suggested $4,200 super baby contribution for primary carers recognises that many women spend a significant period out of the paid workforce caring for children.


19% and 32%

APRA data as at June 2021 confirms the expected outcomes. At every age group from those aged 25-34 through to those aged 60-64, the average male balance is between 19% and 32% higher than the average female balance.


50% gender gap

The 2021 Mercer CFA Institute Global Pension Index highlighted four retirement systems with a gender pension gap of almost 50%. Learn more about the differences in pension outcomes with the special report.


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Almost every year, the super tax system is tinkered with, and still, issues of inequity persist. Now is the time to fix the system in order to make it a fairer system for all Australians.
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Dr David Knox, Senior Partner at Mercer

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Dr David Knox BA PhD FIAA
Senior Partner, Senior Actuary

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