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Money Magazine Australia - - CONTENTS -

Aus­tralia’s re­tire­ment sav­ings sys­tem is re­garded as one of the best in the world – No. 3 out of 30 in the lat­est Mel­bourne Mer­cer Global Pen­sion In­dex. How­ever, fol­low­ing me­dia cov­er­age of the find­ings of the Pro­duc­tiv­ity Com­mis­sion and royal com­mis­sion, ex­ac­er­bated by in­fight­ing be­tween in­dus­try and re­tail funds, the av­er­age Aus­tralian could be for­given for think­ing the su­per sys­tem was bro­ken.

Yes, there are in­ef­fi­cien­cies, most no­tably the num­ber of mul­ti­ple ac­counts with in­sur­ance pre­mi­ums and fees eat­ing away at bal­ances. There are also in­stances where trustees haven’t done the right thing. But steps are be­ing taken to im­prove the su­per of the fu­ture – for ex­am­ple, the 2018 bud­get’s Pro­tect­ing Your Su­per pack­age will re­duce the num­ber of in­ac­tive ac­counts, limit fees for smaller ac­counts and see more con­sol­i­da­tion.

We should re­flect that su­per has de­liv­ered great real re­turns for most de­fault mem­bers over the past decade – an av­er­age of 6.5%pa – and has en­sured that Aus­tralia’s age pen­sion costs re­main un­der con­trol, un­like in much of the rest of the world. Our su­per sys­tem has in gen­eral worked well, and we should be suit­ably proud.

Tim Jenk­ins, ex­ec­u­tive gen­eral man­ager, su­per­an­nu­a­tion, Rice Warner

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