UNACCEPTABLE LEVELS OF RISK IN SUPERANNUATION

ROSS Greenwood (GA 25/6) summed it up perfectly why superannuation should not be left in the hands of “fund managers” and banks and be seen as just another tax lurk.

He starts by saying that “the world of money is ever changing” and includes superannuation in that statement.

He then has to describe how complicated it can be with a lengthy explanation.

That’s not all either, when he says that as fund members age they tend to shift their super away from higher risk growth assets like Australian and international shares and into lower risk, defensive investments, like fixed income and cash and that gradually reallocating super towards less volatile investments can be a sensible strategy when we get older.

Then he seems to contradict himself by going back to say that one should still have a reasonable chunk invested in those higher-risk volatile growth assets, which, suddenly, “should deliver” the higher returns needed.

That is our current superannuation system in a nutshell and when we add two other factors, like having to pick the good from the bad out of that myriad “fund managers” and banks and even the timing of your eventual retirement (who would want to retire the day before another stock market crash?) it all becomes an absolute lottery.

Superannuation, by its very nature, should never attract words like “volatile”, “risk”, or, “ever changing” and should all go into an equivalent of the Future Fund, run by the Government, with minimal charges and a full government guarantee and, ideally, only paid out in retirement in the form of an income. Ed Dimech, Torquay