Superannuation

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Industry superannuation funds face obliteration

Over the weekend, it was revealed that nearly 900,000 Australians have registered their interest to withdraw part of their superannuation nest eggs early. This follows the Morrison Government’s announcement last month permitting those suffering from financial hardship to withdraw $20,000 from their superannuation savings, beginning from 20 April. The number of applications for early release

23

Greedy Labor hoards superannuation trillions

In a video interview with Sky News, Labor backbencher Ed Husic lambasted the Morrison Government’s policy of allowing Australians in financial stress to access $20,000 of their superannuation savings, labelling it “highly irresponsible” and an attempt to drive an “ideological sword” through the superannuation system: “This is going to have a huge impact on retirement

39

Investors stampede superannuation exits

Liberal Senator Jane Hume, Assistant Minister for Superannuation, Financial Services and Financial Technology, appeared on Ray Hadley’s Morning Show (audio below) where she disclosed that 743,000 Australians have already registered for early release of their superannuation. This comes after the Morrison Government last month announced that it would permit Australians experiencing financial hardship to access

13

Let the market judge industry superannuation funds

It has been a sobering month for Australia’s industry superannuation funds, which have been attacked from almost every angle. The harshest attacks have come from Coalition MPs.  Assistant Superannuation Minister, Jane Hume, accused industry superannuation funds of having a “structural weakness… that has been hiding in plain sight” in relation to their over-exposure to unlisted

22

No bailout for industry superannuation desperados

Via the ABC: Nearly 618,000 Australians have applied to get an early release of their superannuation under the Federal Government’s plan to help people out of work and facing financial hardship during the coronavirus pandemic. From April 20, the Morrison Government is allowing retrenched workers and those suffering financial hardship because of shutdowns to access

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