Costello questions government super claims

Changes to superannuation transfers may not see retirees living as comfortably as the government has said they will, Howard government treasurer Peter Costello has warned.

When he introduced a cap of $1.6 million on the tax-free superannuation environment, Treasurer Scott Morrison said such a balance would be equivalent to around four times the single age pension - an assertion that Mr Costello has questioned.

"That is on the assumption of a 5.5 per cent return rate ... does it (the government) really think that? It is issuing bonds at 2 (per cent)," Mr Costello told a Women in Banking lunch, the Financial Review reports.