Industry heads have become less confident of Australia’s approach to the challenges of an ageing population, according to the Financial Services Council/PwC 2011 CEO Report.
The survey found that 15 per cent of chief executives from a range of leading Australian financial services firms were confident that retirement income challenges could be addressed, down from 44 per cent last year.
“It is estimated that the shortfall between the current savings rate and what is needed to sustain a reasonable lifestyle after ceasing work is $897 billion,” PwC asset management leader Andrew Wilson said at the FSC annual conference on the Gold Coast yesterday.
“The proposed increase of 3 per cent in the compulsory superannuation contribution rate would only reduce this deficit by $237 billion, hence more needs to be done to address this issue.
“Chief executives believe that competing government policy priorities, public apathy and lack of engagement with superannuation are key barriers to addressing this issue.”
Respondents in the survey had a number of ideas on how to boost Australia’s national savings including lifting the superannuation guarantee, encouraging and supporting an older workforce, and consumer education.
“Most chief executives consider that at least 15 per cent of income should be contributed to superannuation to achieve an adequate retirement outcome,” Wilson said.
“Some suggest it should be phased – lower at a younger age and higher as people approach retirement.”
Chief executives were also frustrated by the uncertainty regarding the government’s regulatory change agenda, according to the report.
It said industry leaders were concerned that some of the changes could have unintended consequences for consumers, such as increasing the cost of financial advice and worsening Australia’s underinsurance problem.
FSC chief executive John Brogden said the government needed to finalise its reforms to help restore investor confidence and provide certainty for business.
The survey comprised views of 31 chief executives representing around 80 per cent of Australia’s $1.8 trillion in assets under management.
