Superannuation
ASFA strikes back at super detractors

Association of Superannuation Funds of Australia chief executive Martin Fahy has hit out against vocal critics of the super system on the opening morning of the 2019 ASFA Conference in Melbourne today.

Fahy took to the stage to call on the government and Treasury to release the Model of Australian Retirement Incomes and Asset - otherwise known as MARIA - into the public domain, and demanded its inclusion in the ongoing Retirement Income Review.

According to Fahy, the review - which will release a consultation paper later this month - is an opportunity for the superannuation industry to move beyond the "rhetorical hyperbole and dysfunctional narrative economics of retirement funding" which have plagued public debate over the system this year.

"Thirty years on from its modest beginnings our superannuation system has become the target of a misleading and dangerous narrative that seeks to present anecdote as data, internationally recognised success as a threat to the existing capital markets order and compulsion as a dangerous ideological plot to undermine western liberal democracy," Fahy said.

"This combative narrative labels our system, unaffordable, failing lower income earners, inefficient, lacking transparency, and that it eats wage growth.

"At the most ludicrous level it suggests that in the worst-case retirement scenario you can eat your house, rely on a rental supplement, and that your grandparent's retirement was good enough for them and its good enough for you. In summary we can't afford your aspirations."

The ASFA chief said that publishing MARIA - which can combine individual account balances, market returns and HILDA and other data to simulate retirement outcomes under different scenarios - could solve the likely outcomes of different contribution rates, fees and charges, real wage growth, CPI growth and other factors.

"Publication of the MARIA code would allow us to move beyond the fractious debate on adequacy and contribution rates and focus on the next chapter of our unfinished superannuation story," he said.

"That chapter will see large pools of patient responsible pension capital that have the potential to address many of the pressing issues of our country."

Fahy said that as those pools of capital grow, the super system was poised to take advantage of the opportunities that arise from the "creative destructive process at play".

He warned against regulating "our way to better outcomes through an overly zealous focus on short-term investment performance," and said to do so would likely ensure a net negative impact on the system's performance.

"Finally, and perhaps most importantly as we face into the retirement incomes review, the system must be developed in an open and transparent manner," Fahy said.

Without the release of the MARIA modelling, Fahy said the "contagious false narrative" would continue to take hold, and drag the system back.

"Along the way we will encounter headwinds and setbacks but we must stay the course with our aspirations and stare down those that would dismantle our superannuation system with outdated thinking," he said.

Read more: ASFAAssociation of Superannuation Funds of AustraliaMartin FahyModel of Australian Retirement IncomesRetirement Income Review
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