Rice Warner has once again taken issue with the ‘myth’ that most Australians take their superannuation as a lump sum rather than a pension.
Research by industry consultant Rice Warner has found that 83 per cent of the value of all superannuation retirement benefits in 2013/2014 were invested in pensions.
Only 10 per cent of retirement of assets were taken as a full lump sum, according to Rice Warner, while the remainder was taken as a partial lump sum.
“At least a third of the lump sum payments were reinvested, such as in bank deposits, while much of the rest was used to reduce debt, both of which are forms of saving,” Rice Warner said.
Rice Warner projects that 96 per cent of all retirement benefits will be taken as a pension by 2025 as the superannuation system matures.
The ‘myth’ that most superannuation retirement benefits are taken as a lump sum stems from the misinterpretation of overly ‘generalised’ APRA statistics, Rice Warner said.
“Until recently, the regulator did not give a break-up for lump sums related to retirement and those paid for such reasons as the death and incapacity of members.”
“Yet, several commentators simply took the total of all lump sum withdrawals to be retirement benefits.
“In 2014/15, only $18 billion, or 58 per cent, of the $31 billion paid as superannuation lump sums were related to retirement.”
The Productivity Commission’s final superannuation report missed an opportunity to show how the industry’s pre-tax investment focus is p...
The Productivity Commission’s ‘best in show’ proposal is more likely to benefit industry funds over retail funds, according to new dat...
ASX-listed Link Administration Holdings Limited looks well placed to weather superannuation changes at home and the impact of Brexit in its ...