If measures proposed by the Cooper review of the superannuation industry are accepted by the federal government, super funds may be forced to jettison their alternative investments a research firm says.
Chant West, an industry consultant says that superannuation assumptions made by the Cooper review were an unrealistic reflection of the costs associated with the management of an alternative investment portfolio, which can include private equity, hedge funds and unlisted property.
Bill Shorten, the Minister for Financial Services and Superannuation has warned that it would be impossible to raise the superannuation guarantee from 9 per cent to 12 per cent independent of a mineral tax, since such a tax would be required by the government to compensate for a loss in revenue.
Mr. Shorten rejected the suggestion that an increase in superannuation guarantee be kept separate from the mineral resources rent tax, in order to enable legislation to pass through a hostile parliament.
Fund research firm SuperRatings has named Australia’s largest superannuation fund AustralianSuper fund of the year. AustralianSuper has 1.5 million investors and is an industry fund with $33 billion under management.
In giving the award SuperRatings cited that AustralianSuper offered the best value for money amongst all its rivals, and the rating was assessed using both superannuation accumulation and pension draw down phases on an aggregated basis.
Australian business leaders are less optimistic about the country being able to meet the challenge of an ageing population and in particular superannuation according to the results of a survey.
The survey results suggest that less than half of all business leaders were less confident, and that only 44 per cent of chief executives expressed confidence in the Australian government’s policy, with many of those worried that the negative effects may be greater than expected.
Chris Bowen, Federal Minister for Superannuation says he has a lot of work ahead of him, after the results of a study suggest that the retirement savings of Australians only returned 3 per cent a year for over a decade.
An ABC analysis of official statistics released by the Australian Prudential Regulation Authority (APRA) that go as far back as 1997 suggest that for the 13 year period the superannuation system delivered compound returns of just 3.04 per cent.
Jeremy Cooper, the former deputy chairman of the Australian Securities and Investment Commission (ASIC) and author of the controversial government review of the Australian superannuation system, has defended his plan for low cost MySuper accounts.
The accounts are intended as a default for people who do not select a retirement fund. Mr. Cooper who made his comments during a luncheon organized by the Australian Superannuation Funds Association in Melbourne, said that the criticism that his plan was paternalistic could in fact be applied to the entire concept of superannuation.
Financial planners are fiercely opposing the proposal by the Cooper Review, which would ban commissions on insurance in superannuation, fearing that many clients will not be able to afford a fee which is charged upfront.
The Association of Financial Advisers has leveled the accusation against many of the proposals recommended by the review, which was conducted under the leadership of former Australian Securities & Investments Commission chairman Jeremy Cooper, of threatening the income of thousands of planners, by banning the practice of commission payments on all insurance products that are part of the super, including group risk and personal risk.
As many as 200 employees of Australian banking major Westpac could stand to benefit from a plan which proposes to pay super on unpaid parental leave to the lenders permanent staff.
The first such measure to be adopted by an Australian bank would affect all group companies of Westpac, which include St. George, Westpac Bank and BT Wrap and would see the group pay as many as 39 weeks in employee superannuation contributions in addition to existing parental leave entitlements almost immediately.
Volatile global financial markets that plunged in the aftermath of the European sovereign default crisis have consumed the highly anticipated bounce in super fund returns.
The drop in financial markets is likely to result in investment earnings falling below double digits for the financial year, ending at about 9.6 per cent.
A majority of Australians say they are in favour of the government’s decision to implement proposals that would increase the national superannuation rate, whilst more than half of all Australians say they are willing to sacrifice their wages to fund the measure.