Superannuation

51

Labor admits superannuation is a Ponzi scheme (plus an apology)

Labor’s shadow Treasurer, Jim Chalmers, has penned a letter calling on the Reserve Bank of Australia (RBA) to provide a liquidity backstop for cash-strapped superannuation funds so that they can meet member’s redemption requests. Chalmers’ request has arisen following the Morrison Government’s announcement that it would permit Australians to access up to $20,000 in savings

24

Let industry superannuation funds burn

Via Domain: Some of the nation’s largest superannuation funds have the power to delay or suspend withdrawals but the industry has dismissed concerns about a freeze on redemptions as the sector braces for the government’s early access scheme. Hostplus, Rest, Unisuper, Cbus, and MediaSuper all have variations of a clause that could enable the fund

12

360,000 sign up for early superannuation release

The Morrison Government forecast that around $27 billion will be withdrawn from superannuation funds by people who have been hit financially by the coronavirus pandemic. New figures from the Australian Taxation Office (ATO) show that around 361,000 people had registered interest in such a withdrawal within three days of the policy being announced. However, the

23

Industry superannuation funds cook the books

Liberal Party MP, Tim Wilson, has used his position as House economics committee chairman to question why industry superannuation funds have failed to property write-down their unlisted assets to reflect recent adverse market movements: The unlisted asset holdings of super funds are typically revalued quarterly. But a number of large funds have made ad hoc

24

A new superannuation rort emerges

The Australian Government has inadvertently opened another superannuation loophole that enables people to simultaneously put money into superannuation and then withdraw it, thereby saving on income tax: When parliament approved the Coronavirus Economic Response Package Omnibus Bill 2020 last week, they put no new restrictions on how people could contribute into super. This means that

21

Stop press: Superannuation fund says super bailout a great idea

Via AFR: When AustralianSuper chief executive Ian Silk puts the case for possible Reserve Bank of Australia liquidity support for industry super funds, he points to the fact that the financial system is in unchartered territory. He says if the Treasury’s estimate of a $27 billion drawdown of super savings by millions of Australians proves accurate, the

34

Superannuation is a giant bubble

Warwick Smith, research economist at the University of Melbourne, has penned a scathing attack on Australia’s compulsory superannuation system, labeling it a “ponzi scheme” that is helping to drive “speculative bubbles”: If our goal is an adequate and sustainable income in retirement for all Australians, our main priority ought to be ensuring that those remaining

38

Your Industry Superannuation Fund is about to lie to you

Most superannuation funds, and especially industry funds have significant balances in unlisted assets. Many are telling you that these assets haven’t lost money, or are only down a little despite sharemarkets being down close to 30%. This gives rise to perverse incentives for superannuants: if you leave one of these funds now, you will get

21

Superannuation funds beg for RBA bail out

Some of Australia’s superannuation funds are facing a liquidity crunch due to holding illiquid unlisted assets at the same time as the Morrison Government is permitting members to make early redemptions: Jeremy Cooper, Chairman of Retirement Income at Challenger Limited and formerly the Chair of the government’s Super System Review in 2010… warns that there

8

Superannuation nest eggs smashed by ASX crash

The past month has been one of the worst on record for the Australian share market and by extension our superannuation system, which is among the most heavily concentrated in equities in the world. The bellwether All Ordinaries Index, which tracks the 500 largest companies listed on the Australian Stock Exchange (ASX), has lost fully

41

Super funds to “freeze” on cash run

Via The Australian: The government’s surprise move to allow broad-ranging early access to super to Australians of all ages has sparked fears major funds may “freeze” withdrawals in the face of a torrent of applications to the scheme. Critics of the plan that allows Australians facing financial stress to take out a total of $20,000

13

Superannuation’s biggest flaw: Market risk

This site has gone to great lengths to expose the critical flaws in Australia’s system of compulsory superannuation and to explain why superannuation is not a genuine retirement pillar. These problems can be broken down into five key areas. First, superannuation is voluntary for those that are self-employed, casually employed, or homemakers. Therefore, it misses

1

Superannuation cure “worse than the disease”

The Australia Institute (TAI) released startling research on the growing cost of Australia’s compulsory superannuation system, which is costing the federal budget much more than it saves in Aged Pension costs: Superannuation tax concessions are almost as big as the cost of the age pension. They’re also growing at twice the rate of the age

47

Abandoning mandatory superannuation the “best possible stimulus”

The Australian Adam Creighton has tweeted suggesting that freezing compulsory superannuation contributions would provide the economy with the “best possible stimulus”: The best possible stimulus would be suspension of mandatory superannuation contributions, supercharging take-home pay by around 10 per cent and avoiding the waste that accompanies government spending.#auspol — Adam Creighton (@Adam_Creighton) March 9, 2020

15

Gender inequality highlights superannuation’s epic failure

The faux outrage over women’s lower superannuation savings in retirement has hit fever pitch, with range of commentators demanding action. For example, South Australia’s Equal Opportunity Commissioner claims the superannuation system is failing women: Superannuation, or rather the lack of it, is a huge problem for women. The super system works pretty well if you

3

ANU to test if compulsory superannuation lowers wages

The Australian National University (ANU) has been commissioned by the Morrison Government to test whether raising the superannuation guarantee to 12% would lower Australian wage growth: Appearing before a Senate Estimates committee on Thursday, Robb Preston, the manager of Treasury’s retirement income policy division… said the ANU’s tax and transfer policy institute, a well-respected policy

1

Compulsory superannuation is failing low income Australians

The Grattan Institute has released its submission to the federal government’s Retirement Incomes Review, which explicitly argues that Australia’s system of compulsory superannuation is failing lower-income workers. Grattan also argues that instead of lifting the superannuation guarantee, which would cost the Budget an additional $2 billion a year, the government should instead bolster the Age

3

Australia’s superannuation system is driving inequality

Chief economist of The Australia Institute, Richard Denniss, is the latest commentator to expose the gross inequity of Australia’s compulsory superannuation system: This year, the government will spend more than $41 billion on tax concessions for superannuation with the stated purpose of helping people save for their retirement. But the way the rules are designed

8

Industry funds admit 12% superannuation will benefit rich

The lobby group representing industry superannuation funds, Industry Super Australia (ISA), has admitted in its submission to the Retirement Income Review that lifting the superannuation guarantee (SG) from the current 9.5% to 12% will primarily benefit high income earners: According to ISA modelling, the benefit of a higher SG rate will be weighted heavily to

7

The superannuation vampire is bleeding the federal budget

Actuarial firm, Rice Warner, is the latest to acknowledge that Australia’s superannuation system costs the federal budget more than it saves in aged pension costs, and estimates that raising the superannuation guarantee (SG) from 9.5% to 12% would cost the economy 0.22% of GDP “through this century”: The Australian government gave up A$41bn (€25bn) in

5

Women’s group lobbies against 12% compulsory superannuation

Over the past month, we have witnessed various groups call for explicit government intervention to bridge the discrepancy between male and female superannuation savings. It started when the ACTU demanded the superannuation guarantee be lifted to 15% for women. Shortly afterwards, KPMG requested the government make direct contributions into women’s superannuation accounts, which was echoed

1

Superannuation increase means 20% lower wage growth

Labor leader, Anthony Albanese, last week attacked “an unholy coalition attacking the increase in the Superannuation Guarantee”: At the moment we are witnessing an unholy coalition attacking the increase in the Superannuation Guarantee. They want to see super wound back or abolished. The prescriptions of ACOSS and others play into the hands of the Liberal

7

Retirees aren’t worried about their retirement

While a lot of Australians fear retirement, they don’t appear to mind the reality, according to the latest NAB wellbeing index: Not having enough money to finance retirement remains the top cause of financial anxiety for Australians, but the concern greatly diminishes once people retire, National Australia Bank’s latest wellbeing survey shows… But NAB’s survey