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AMP Chief Says Government Should Increase Mandatory Superannuation Contributions
Craig Dunn, chief executive of Australian wealth management company AMP has raised the temperature of its bid to acquire AXA Asia Pacific Holdings (APH), by saying the market likes the prospect of a deal and wants the target to continue negotiations for a transaction.
AMP also said it would increase the value of superannuation contributions made by the company on behalf of its staff.
AMP says it intends to increase superannuation contributions from the current mandatory 9 per cent, to 12 per cent over the next half decade.
Speaking at a business conference, Mr. Dunn said that AMP thought that there was reason for Australia to start looking at a broader increase for all Australian workers.
“The Chinese save on average about 30 times more than the average Australian. It is Australia’s mandatory superannuation that has created the savings pool that we have today. While we have a very strong national retirement system there is still a question whether Australians are saving enough for a comfortable retirement.” Mr. Dunn said.
Mr. Dunn says he believes that approximately 4 million Australians do not have enough retirement savings, which is estimated to be approximately 65 per cent of pre tax annual income, during working life to fund ones retirement.
The super fund industry, which has approximately $2 trillion under management, is expected to be revamped after Jeremy Cooper, who heads up the government’s review, suggested that there was a need for funds to consolidate.
Mr. Dunn says he believes that the upward march of both AXA APH’s and AMP’s share price since the proposed deal was announced was market vindication of his plans for an $11.7 billion merger, and signified that the market believes a merger of the two firms was in the best interest of both company’s shareholders.
“We’ve been pleased with the way the AMP share price has moved up since the proposal was made,” Mr Dunn said.
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One Response to “AMP Chief Says Government Should Increase Mandatory Superannuation Contributions”
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We just wrote a two piece column on this topic at Zippy if anyone wants to read more http://www.zippy.com.au/super-aint-so-super-part-1/2009/11/