Suppression of wages has planted time bomb in superannuation system

A slowdown in wages growth, driven in part by a suppression of wages, has planted a $100 billion time bomb in the superannuation system, warns a new report from the Australia Institute.

The Australia Institute says a key factor behind the record slow wages growth in Australia is the “aggressive measures implemented by employers in recent years to suppress wage growth, and even to significantly cut wages”.

“These actions directly undermine superannuation savings, and hence the future retirement incomes of affected workers.” Read more...

Superannuation system is delivering on core purpose: Vanguard/Sunsuper

The superannuation system is on track to serve its purpose as it matures, according to a report released jointly by Vanguard and Sunsuper.

“Having grown from modest beginnings to near-universal coverage of the working population and over $2 trillion in assets over the past 30 years, the system is on its way to reaching maturity as a vehicle for all facets of accumulation, management and drawdown of retirement assets,” says the How Australia Saves report.

“Amid ongoing discourse about the system’s efficacy in the face of regulatory change, varied levels of member engagement and volatile investment markets, How Australia Saves shows that by and large the system is delivering on its core purpose,” said Vanguard’s Senior Manager Superannuation Policy, Paul Murphy, who is also co-author of the report. Read more...

Public support for higher super tax concessions, survey shows

higher superannuation contributions, higher superannuation tax concessions, Per Capita Tax Survey 2015Research by think tank Per Capita shows that higher superannuation contributions and increased superannuation tax concessions have the most public support as ways to fund longer retirements.

“Retirement income policy has become increasingly contested in recent years. The debate has unfolded along several dimensions: fiscal sustainability, adequacy of incomes given longer lives, and the fairness of the tax concessions designed as incentives to save through superannuation,” said Per Capita. Read more...

Superannuation needs to be considered as part of total wealth

Roy Morgan Research, Superannuation and Wealth Management in Australia, household total wealthRoy Morgan Research says superannuation needs to be considered as part of total wealth, at a time when most people are not engaged with planning for retirement.

Recently released conducted by Roy Morgan shows that only 35.8% of respondents said they “should do something about planning my financial future”. Only 29.4% answered “I have planned enough to be financially secure in the future.” 26.7% said “retirement in too far away for me to plan it now.”

Australian super fund #1 globally for climate change risk management

Australia superannuation funds, climate change risk, global rankingsAn Australian superannuation fund has received the top global ranking for management of climate change risk.

The Local Government Super fund regained the top ranking in the 2014/15 Asset Owners Disclosure Project (AODP) Global Climate 500 Index. The index rates some of the world’s largest asset holders, including pension funds, insurance funds, sovereign wealth funds, foundations and endowments.

Superannuation needs reform: BDO Tax Reform Survey 2015

2015 BDO Tax Reform Survey, superannuationThe 2015 BDO Tax Reform Survey has found over a third of respondents think the superannuation contribution caps are inconsistent with the purpose of superannuation.

The fourth annual BDO Tax Reform Survey finds that “Australians are tired of waiting and want the Government to get on with the business of reforming Australia’s tax system.”

67.4% of respondents either agreed or strongly agreed that “the capping of superannuation contributions is inconsistent with the original policy of the superannuation scheme of Australia.” 14.2% disagreed with the statement. Read more...

Superannuation to continue to grow as boomers retire

Superannuation projected to continue to grow as boomers retire, SMSF stabilise, Rice WarnerSuperannuation is projected to continue to grow as the baby boomers shift from accumulation to retirement, while SMSFs stabilise.

This growth is both in terms of funds under management and proportion of GDP, according to research and advice firm Rice Warner.

This should provide trustees with confidence that (collectively) funds will have strong liquidity and will be able to maintain long-term, growth-based investment strategies. This also will reward fund members and pensioners.