Australia's superannuation savings gap could be reduced by $400 billion if the preservation age for superannuation is reviewed, the chief of the Financial Services Council (FSC) said yesterday.
John Brogden said increasing the preservation age to 62 from 60 would make a "direct contribution to reducing the gap and would increase retirement sayings".
At present, Australia has a superannuation savings gap of $836 billion, he said.
"This is the difference between what is actually being saved through superannuation and what is needed to sustain a comfortable lifestyle after ceasing work," he told an audience at the 2012 FSC conference.
"Research conducted by Rice Warner Actuaries for the FSC shows that increasing the time spent in the workforce for every Australian by just one year reduces the superannuation savings gap by an extraordinary $200 billion.
"This makes increasing labour force participation of older workers in Australia a policy imperative for the financial services industry as well as for the government."
He said while the government deserves credit for increasing the age pension eligibility to 67 in 2009, the time has come to consider "whether the superannuation preservation age of 60 is still appropriate".
"To achieve the dual aim of reducing longevity risk in superannuation and increasing labour force participation of older workers to drive economic growth, Australia needs to debate the appropriate preservation age for superannuation," he said.
"The increase in the age pension eligibility age to 67 opened the gap between access to superannuation and eligibility for the age pension to seven
