A review into Australia’s retirement income system has found it to be effective and sound, but questions future legislated increases to the superannuation guarantee.

The long-awaited independent review handed to the Morrison government in July was released by Treasurer Josh Frydenberg on Friday.

It examines the links between superannuation, the age pension and voluntary savings, including homeownership.

“This independent report makes clear that Australia’s retirement income system is effective and sustainable,” Mr Frydenberg said.

“While the report doesn’t make recommendations, its key observations will play an important role in better informing future public policy and the retirement outcomes delivered to Australians.”

One area that is likely to be contested by Labor and unions is future legislated incremental increases in the compulsory superannuation guarantee.

These are due to come into effect in July, starting with a rise from 9.5 per cent to 10 per cent, and then to 12 per cent over a number of years.

The government has yet to make a decision on whether to pause the increases.

The review found that while a rise in the super guarantee would result in people having better living standards in retirement, it would come at a cost to people during their working lives, particularly lower-income earners.

“The weight of evidence suggests the majority of increases in the superannuation guarantee come at the expense of growth in take-home wages,” the report says.

“If the superannuation guarantee stayed at 9.5 per cent rather than increasing to 12 per cent, they would also have higher incomes during their working life.”

Furthermore, the report says increases to the guarantee will benefit higher-income earners more than low- or middle-income earners because this group has the largest compulsory contributions and receives higher tax concessions.

The report also found the age pension is more than a safety net, playing an important role in supplementing the superannuation savings of retirees and allowing them to maintain living standards.

“It also provides a buffer for retirees whose retirement income and savings fall due to market volatility, and for those who outlive their savings,” it said.

Homeownership was important in achieving security in retirement, removing the need for income to pay for rental accommodation while providing an asset that can be drawn on to supplement retirement income.

The report also backed the government’s early release superannuation scheme to help cushion the economic blow of the COVID-19 pandemic.

It allows Australians to access up to $20,000 from their super accounts over two financial years.

“Offering prudent and limited access to superannuation prior to retirement is consistent with the objective of balancing living standards pre- and post-retirement.”