Post by Banjo on Nov 30, 2017 7:28:54 GMT 7
Complex but interesting article on superannuation.
Some interesting comments as well.
The chief executive of the Association of Superannuation Funds of Australia, Martin Fahy, is getting nervous. He fears a ‘populist’ future government might end the compulsory 9.%5 superannuation guarantee, thereby ending the rivers of gold flowing to the sector. From The AFR:
The scenario goes something like this: a populist politician gets elected sometime in the 2020s on the back of a promise to end the super guarantee levy. This simplistic, backwards policy option hands every Australian an instant cash bonus each week equal to 9.5 per cent of their pay, less tax.
It would mark the destruction of former prime minister Paul Keating’s vision for a privatised savings system that progressively makes an increasing number of Australians self sufficient in retirement while lowering dependency on the aged pension.
Fahy, who this week hosts 1800 people at the ASFA annual conference in Sydney, worries that superannuation is becoming increasingly vulnerable to this sort of super Armageddon…
“I think all the vocal criticisms of financial services, and within that superannuation, means that the narrative that is superannuation is vulnerable to short-term populist thinking, where somebody would try to appeal to people with an offer to have a sudden increase in take-home pay at the cost of long-term retirement funding,” he says.
“We need to be conscious of that because the 9.5 per cent super guarantee levy won’t get us there. We need to get to 12 per cent. For most people, absences from the workplace and potential disruption to careers … mean we need to stay the course and play to our better selves.”
Maybe if Fahy wants to see off a populist attack on superannuation, then he and other leaders in the industry should address the extortionate fees that it charges its members.
Despite the huge explosion of superannuation balances since the superannuation guarantee (compulsory super) was introduced in 1993, average fees and expenses have barely changed and are way above the OECD average, according to the Grattan Institute (see below charts).
www.macrobusiness.com.au/2017/11/australias-super-fat-cats-getting-nervous/
Some interesting comments as well.
The chief executive of the Association of Superannuation Funds of Australia, Martin Fahy, is getting nervous. He fears a ‘populist’ future government might end the compulsory 9.%5 superannuation guarantee, thereby ending the rivers of gold flowing to the sector. From The AFR:
The scenario goes something like this: a populist politician gets elected sometime in the 2020s on the back of a promise to end the super guarantee levy. This simplistic, backwards policy option hands every Australian an instant cash bonus each week equal to 9.5 per cent of their pay, less tax.
It would mark the destruction of former prime minister Paul Keating’s vision for a privatised savings system that progressively makes an increasing number of Australians self sufficient in retirement while lowering dependency on the aged pension.
Fahy, who this week hosts 1800 people at the ASFA annual conference in Sydney, worries that superannuation is becoming increasingly vulnerable to this sort of super Armageddon…
“I think all the vocal criticisms of financial services, and within that superannuation, means that the narrative that is superannuation is vulnerable to short-term populist thinking, where somebody would try to appeal to people with an offer to have a sudden increase in take-home pay at the cost of long-term retirement funding,” he says.
“We need to be conscious of that because the 9.5 per cent super guarantee levy won’t get us there. We need to get to 12 per cent. For most people, absences from the workplace and potential disruption to careers … mean we need to stay the course and play to our better selves.”
Maybe if Fahy wants to see off a populist attack on superannuation, then he and other leaders in the industry should address the extortionate fees that it charges its members.
Despite the huge explosion of superannuation balances since the superannuation guarantee (compulsory super) was introduced in 1993, average fees and expenses have barely changed and are way above the OECD average, according to the Grattan Institute (see below charts).
www.macrobusiness.com.au/2017/11/australias-super-fat-cats-getting-nervous/