Compulsory super detrimental: ResearchBY ELIZABETH MCARTHUR | WEDNESDAY, 29 MAY 2019 11:43AMCompulsory superannuation is detrimental to many people and a voluntary super system would provide greater benefit, according to new research.
Related News |
Editor's Choice
Mega super fund opens first international office
Australian Retirement Trust (ART) has opened its first international office in London to build out a "leading global investment capability."
Impact Alpha Partners adds to board
The budding consulting firm has added the former chief executive of Blue Orbit Asset Management and U Ethical Investors' former head of ethics and impact.
How to win in today's wealth management industry: EY
To outperform in the wealth management industry, leaders must conquer several "underlying challenges" by 2030, according to an Ernst & Young (EY) report.
FSC expands financial advice membership
The Financial Services Council (FSC) is expanding its remit into the financial advice sector by adding six licensees to its network of members.
Further Reading
Sponsored by | Where do advisers invest their time?The stage 3 tax cuts have sparked discussions on bracket creep. Implementing a tax-effective investment strategy is crucial now more than ever. |
Sponsored by | Quality and Yield. A Powerful combination.With central bank rates seemingly peaked, investors are not awaiting yield increases. We're bucking the trend with investment rates at decadal highs |
Sponsored by | Why it could be a good time to be a growth contrarianGrowth-style companies are in vogue, but you may need to think outside the box to ensure you don't overpay. |
Products
Featured Profile
Fiona Mann
HEAD OF LISTED EQUITIES AND ESG
BRIGHTER SUPER
BRIGHTER SUPER
Brighter Super head of listed equities and ESG Fiona Mann was shaped by a childhood steeped in military-like discipline and global nomadism. Andrew McKean writes.
Given the abysmal penetration and management of superannuation in the years before the Hawke/Keating overhaul (I did a national survey of private and corporate super for Personal Investment magazine back in May 1985), this has got to be one of the most stupid pieces of economic research on record.
The article is right about one thing "correlation does not equal causation" not only in this case but in so many other instances.
Cochrane's comment is correct in that prior to the Hawke/ Keating overhaul Superannuation was normally only available to permanent employees ( after a qualifying period) of Federal/ State & local government departments /instrumentalities &large /medium corporations.
Small employers were unlikely to provide super & in most industries short term / casual employees were not even considered.
Company funded benefits were subject to vesting scales that started after 5-10 years membership so that on termination a member might only get their own contributions back with a small amount of compound interest. The benefit could be paid out at any age, was not subject to tax until 1 July 1983 & was usually taken in cash. There was no system in place for direct transfer to another fund.
Today SGC contributions are fully vested from day one, subject to preservation & the accumulation can be readily transferred to another fund.
Award Super only started in 1987at 3% , the SGC at 3% in 1992 - only rising to 9% by 2002 & to 9.5% in 2013.Even if the 9.5% had been payable over the 22 years the accumulation of 2.09 times the average salary paid would not provide a pension to live on.
It must be remembered that that if the 9.5% was paid as wages it would be subject to tax & the employee would only receive 7.7% (19%tax), 6.0% (39%tax) & 5.2% (45%tax).
Compulsory super was meant to be the long-term answer to offset the ever-increasing cost of the Age Pension, but ongoing political interference is not allowing it to achieve that objective.