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Members lack trust in super system
The superannuation industry faced a severe trust issue from its members and needed to focus on educating them to develop some confidence, a financial adviser told Sunsuper's Women and Money Summit.
Bloom Advisory Group Certified Financial Planner, Jennifer Porter, told a panel discussion there was a sentiment of mistrust about super among members, particularly among those earning lower levels of income, who were not embracing super.
"It was something CBA did recently, it was an innocent comment about how you educate your children about super, and social media slamming that, was I don't trust super, no one should trust, super's only for politicians, super's only for the wealthy," she said.
Dartnall Advisers principal and senior adviser, Eleanor Dartnell, said people were unaware that the underlying assets in a super fund are no different than their other investments, and were scared because somebody else was deciding on how their money was invested.
"Their preference is to do it their own way where they make the decisions. I think that's a fear that's got to go with better education," she said.
Along with education, Dartnell urged for policies that would enable those retiring to downsize their family home and roll those proceeds into a super fund so they could fund their own retirement.
"What's happening is they're still living in family homes that are too big for them, too costly for them, because to downsize they're putting untaxed money into a taxed environment. And we need to change that," she said.
While half of Australians believed women should be paid more super than men to close the gender savings gap, only 37 per cent of men supported this, compared to 64 per cent of women.
However, chair of a Senate inquiry into economic security for women in retirement, Senator Jenny McAllister, said both men and women were equally uncomfortable with the idea of paying more super to women as a policy measure.
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Why do we keep hearing misleading comments about a supposed "gender savings gap"?
Of course if women take a couple of working years off then they will have lower balances than men at a particular older age, however to have 15 years in retirement a man would need to retire at 65 whereas, due to her longevity advantage, a woman could retire at 67. Those "deferred" 2 years in the workforce will compensate for her having had time off work earlier in her life, particularly with the benefit of compond interest on her larger balance close to retirement.
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