News & views
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