Over three years of membership research conducted by the Superannuation Trust of Australia has led to one undeniable conclusion — the majority of ordinary Australians are facing a financially insecure retirement.
That is the bottom line of the message presented to the Conference of Major Superannuation Funds on the Gold Coast by STA chief executive Mark Delaney.
It was a message delivered at one of the earlier sessions of CMSF and one which tended to resonate throughout the conference as delegates discussed emerging trends in the superannuation industry.
Delaney says STA has more than 450,000 members who reflect ordinary working Australians and the reality is that many people facing retirement in the next 15 years do not have sufficient savings to provide a livable income.
“Our internal membership research shows that more than 65 per cent of members aged 50 or over — the members who will retire in the next 15 years or so — have account balances of less than $10,000,” he says.
What is more, Delaney is critical of the media and some people in the superannuation sector who he believes are painting a picture that is altogether too optimistic.
“The rosy picture painted by the superannuation industry through the media is failing to warn many members that they must make financial decisions now to help see them into a more secure retirement,” he says.
Delaney says, however, that there is also a challenge for Governments contained in his Fund’s research and that politicians need to realise that many people will continue to need support because superannuation will not be able to deliver even the most basic retirement income.
What is interesting about the STA research presented at the CMSF is that it strongly correlates to the findings of US research conducted by Towers Perrin and published in Super Review last month. That research, Redefining Retirement in the 21st Century, indicated that most respondents were prepared to work longer because they simply didn’t expect lifetime financial security.
Similarly, the STA research suggests that most respondents, regardless of age, are not confident they will have sufficient funds when the time comes to retire.
Perhaps more importantly, the STA research also suggests that many fund members not only have a poor understanding of superannuation but feel insecure and lacking in control.
