Raising the superannuation guarantee (SG) to 12 per cent, as advocated by most of the super industry, would cost less than the Grattan Institute has claimed, Rice Warner believes.
The research house said that raising the SG to 12 per cent would cost less than expected, hitting out at claims by the Grattan Institute that it would cost the average worker $30,000 were “sensational”.
“In fact, [Grattan’s] analysis has less to do with the SG level, but is more about the issues of means-testing of the Age Pension, which we have documented in detail and which will be described more fully in an Actuaries Institute Green Paper on retirement to be released in the next month,” Rice Warner said.
It would also cost less in the sense that it would improve investment returns for super funds, as, according to Rice Warner, professional management of pooled savings produced higher returners than would be achieved were funds privately invested, and build up Australia’s capital markets. The consultancy noted that this was particularly beneficial as the nation had “an infrastructure backlog and a technology deficit”.
Further, a higher SG of 12 per cent would improve more people’s position in retirement and had the advantage of reducing long-term age pension costs by to two per cent of GDP by the turn of the century.
Raising the SG wouldn’t do much to help high income earners, but rather lower and middle-income earners as the SG is not paid on income above $221,080 a year and concessional contributions are capped at $25,000 a year.
Michael Lovett, who left the investment firm just three months after launching its Vanguard Super offering, has taken up a chief executive role at an Australian asset manager.
The Central Bank of Ireland has granted the approval of Equity Trustees’ exit from its Irish operations, with the transaction expected to be complete on 30 April.
Super returns continued to climb in March, raising hopes of delivering double-digit returns by June depending on the performance of this next quarter.
The dedicated super fund for emergency services and Victorian government employees is under fire for unpaid entitlements to transport employees, which could exceed $40 million.
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