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Future Fund could leave workers $124,000 worse off
Following recent speculation that the Future Fund could be designated as a public offer super fund as a default fund, a former Treasury official has found that workers could end up $124,000 worse off at retirement if they were in the Future Fund rather than some industry super funds.
Phil Gallagher found a performance difference of 13.6 per cent of workers’ retirement benefit, based on a salary of $80,000 pa, or $124,850 between average top quartile industry fund pension options and the Future Fund.
According to Industry Super Australia (ISA), Bernie Dean, this showed the Future Fund was not a viable option for workers’ superannuation.
“We need to find ways of connecting workers with quality super funds, not find new ways for them to end up with less in their accounts,” Dean said.
“The extent of the loss calculated under the Future Fund scenario suggests ideology is blinding some to the best ways to put members’ interests first.
“The Productivity Commission has ignored the evidence and recommended a flawed scheme, and, now, people are suggesting we consign workers to an underperforming government-run fund.”
Gallagher, who was also ISA’s special retirement income adviser, based the analysis on super funds’ performance over the last seven years, the Future Fund’s recent performance, and modelled retirement savings from age 30 for almost 40 years.
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