Australian superannuation funds are delivering the third best retirement savings system in the world, with the Association of Superannuation Funds of Australia (ASFA) warning that it is only “misleading analysis [leading] to sensationalist newspaper headlines” that suggest otherwise.
ASFA said that such headlines “only served to alarm Australians and detrimentally impact retirement outcomes”, saying that according to the 2017 Melbourne Mercer Global Pension Index only the Netherlands and Denmark have better systems.
“It is important to compare like with like when making fee comparisons,” ASFA said.
“For example, investing in government bonds may come with a lower fee, but Australian super funds achieve high returns from unlisted infrastructure, property and other investments and these cannot be obtained by investing in indexed funds.”
The group also said that fees for managing Australian super funds were comparable to those in other countries with high levels of investments in equities, pointing out since the introduction of MySuper and other reforms fees had fallen.
ASFA also emphasised that:
“Superannuation is working … it is important to get the facts straight, because not doing so simply reduces confidence in the system, disengages the community and leads to worse outcomes in retirement,” ASFA said.
The research house has offered a silver lining after super fund returns saw the end of a five-month streak last month.
A survey of almost 6,000 fund members has identified weakening retirement confidence, particularly among those under 55 years of age, signalling an opportunity for super funds to better engage with members on their retirement journey.
The funds have confirmed the signing of a successor fund transfer deed, moving closer to creating a new $29 billion entity.
A number of measures, including super on Paid Parental Leave, funding to recover unpaid super, and frameworks to encourage investment in the energy transition, have been welcomed by the superannuation industry.
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