A long-standing rule that has excluded nearly one million low-income Australians from accessing superannuation pensions is now facing serious scrutiny. Leading super fund Cbus has removed its previously enforced minimum balance requirement, prompting new calls for change across the industry. The move challenges the current stance of many large super funds that continue to maintain high entry barriers, preventing retirees with modest savings from accessing pension options.
Until recently, most major superannuation funds required minimum balances, with some set at $50,000, before members could begin drawing down a pension. Cbus had officially listed a $10,000 minimum, though in practice a $20,000 threshold was often applied. The fund's decision to allow pension access regardless of balance level comes after mounting criticism from consumer advocacy group Super Consumers Australia and several retirement policy experts.
While some funds such as AMP and MLC never imposed pension minimums, larger players like AustralianSuper, Hesta and Australian Retirement Trust still require members to hold between $30,000 and $50,000 to be eligible. These minimums do more than block access to pensions. They also stop qualifying members from receiving retirement bonuses, which in some cases are worth up to $10,000. Recent commentary from Federal Treasury supports ending these restrictions entirely by advocating accessible pensions for all eligible members regardless of super balance.
Analysts estimate that the existing rules prevent around 50,000 Australians each year from starting a super pension. Although funds argue that managing low-balance pensions increases administrative strain and raises sustainability concerns, their position is becoming difficult to justify. As the focus shifts to equity and fairness in retirement, major funds are now under growing pressure to re-examine whether their policies genuinely support the needs of all members.
