When Paul Keating introduced compulsory superannuation in the early 1990s, it established more than a savings system - it enshrined a foundation for our future retirement policy. That foundation gave Australians the confidence to contribute from their earnings and personal savings over the decades. They trusted that the framework - built with budgetary pressures and equity in mind - would support them throughout their working lives into retirement.
Three decades later, the system bears the marks of substantial reforms that have altered its original shape.
Frequent changes to thresholds, concessions, eligibility rules, disclosures and products have created uncertainty about how the system will operate in future. What began as a stable, enduring concept has arguably evolved into a system defined by continual change.
Constant shifts in the rules have created a perception of unpredictability. While its core purpose as a retirement savings vehicle remains robust, the settings that shape it often appear less certain. Stability risks becoming the most fragile aspect of the superannuation system, and with it the trust that has long underpinned Australians' path to a comfortable retirement.
Policy shifts and the erosion of trust
No single measure explains the erosion of confidence; it is the cumulative pattern of change that matters. Since the early 1990s, more than 70 significant changes have reshaped superannuation.
The sheer volume of reforms has left the rules feeling open to constant revision. These include the Division 293 tax in 2012; the transfer balance cap, total superannuation balance measures and the removal of anti-detriment concessions in 2017; and, more recently, the proposed Division 296 tax on earnings from large account balances. Whether the legislation is delayed, retained in its current form, or altered, remains uncertain. What is clear, however, is that the debate highlights a broader challenge: policy settings are rarely seen as settled.
This uncertainty can add complexity and make trust in the system harder to maintain. Recent research underscores the point: retirement optimism remains low, with just 33% of Australians in 2025 confident about their retirement - a clear sign of how fragile confidence has become in the face of ongoing change.
As the Association of Superannuation Funds of Australia has emphasised, certainty and stability are essential for a well-functioning retirement system. Without these attributes, the superannuation system as we know it cannot maintain the levels of trust required to give Australians comfort that their desired retirement outcomes can be achieved.
The ripple effects of instability
The proposed Division 296 tax is a reminder of how quickly this fragile confidence in the superannuation system can spill into real-world decisions.
The mere prospect of change saw some self-managed super funds move quickly - selling assets or restructuring portfolios - while others looked beyond super, funnelling wealth into investment bonds, property or family trusts. Investment bonds, in particular, have seen heightened interest, as they have been subject to fewer policy changes over time and are viewed as a credible alternative tax-effective wealth accumulation vehicle. While these moves complement, rather than reject, superannuation, they show that when trust falters investors act. This tests the system's resilience and underscores the vital role of advisers in restoring confidence and providing clear guidance.
More recently, the Government's 2025 Economic Reform Roundtable recommended a fairer intergenerational tax system, including changes to superannuation concessions to improve equity for younger workers. While no specific policy has been announced, it is clear that further reforms to superannuation are likely.
This uncertainty or change risks eroding one of superannuation's greatest strengths: the collective trust that has kept Australians engaged, contributing and invested for more than three decades.
Reform must put trust first
Stability does not mean standing still. Superannuation must adapt to preserve equity, manage costs and respond to demographic and economic change. But reform without stability risks undermining the very confidence that made superannuation one of Australia's great policy successes.
Trust, therefore, must be the first test of any change. A system designed to span generations demands bipartisan discipline and enduring policy settings, not constant adjustments with every election cycle. Without that assurance, even well-intentioned reforms can weaken the system they seek to strengthen.
