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Exploring stronger links between superannuation and aged care

Leading seniors’ advocacy group, COTA Australia, has partnered with Industry Super Australia to host a high-level roundtable on superannuation fund investment in Melbourne today.

Speaking at the roundtable Nick Mersiades, Director of Aged Care, Catholic Health Australia said: “If we look at the cold hard figures, our current aged care system is simply not sustainable.

“By 2054-55, we will see an increase in the population of 65-84 year olds from 3.1 million to 7 million.

“Based on current supply targets, government spending in the sector will increase from less than 1% of GDP currently to 1.7% by 2054-55.

“Sustainability concerns have prompted calls to greater contributions from those older Australians who are able to pay – currently, home care income tested fee contributes 2.5% of care costs, meanwhile residential care means test contributes 6% of care costs,” said Nick Mersiades.

COTA CE Ian Yates said: “The aged care sector will be needing trusted institutions willing to invest in much-needed infrastructure. It would be terrific to see greater involvement amongst super funds.

“Demand for aged care is growing rapidly, with the Aged Care Financing Authority estimating the residential care sector alone will require $35 billion to cater for this demand.

“Looking beyond investment, industry super funds have the opportunity to play a unique role in improving aged care literacy among older Australians.

“Older Australians face a number of challenges when entering into an aged care facility and many lack the information and resources required to make informed choices.

“Industry super funds can offer retirement information and planning services to older Australians so they are better equipped when weighing up their different retirement options,” said Mr Yates.

“It’s an opportunity to speak with members about getting their financial and legal affairs ready for later in life. Getting Powers of Attorney in place, developing their strategies to remain independent at home, and simply understanding what aged care means today is not the same as it was for our grandparents.

In his presentation, Mr Yates, also reiterated the importance of ensuring that the design of Comprehensive Income Products for Retirement (CIPRs) provide for people to fund their aged care.

“CIPR’s are designed to mitigate the risk of a person outliving their retirement savings, providing older Australians with flexibility and assurance.”

Industry Super Chief Executive David Whiteley said: “The forum today was a pertinent opportunity to better understand where aged care is headed and how industry super funds can play a positive role.”

The roundtable was attended by representatives from Australian Super, Cbus, Hesta, IFM Investors, ME Bank, ISPT, Catholic Health Australia, COTA, the ACTU and Industry Super.

Media contact: Ian Yates 0418 835 439, Bronte Kerr 0411 676 269

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