Industry funds have launched an offensive at their “detractors in Canberra” as they stare down the barrel of a freeze to the superannuation guarantee.
Australian Institute of Superannuation Trustees (AIST) CEO Eva Scheerlinck warned that the upheaval created by Australia’s first recession in 29 years has now extended to the way profit-to-member funds invest on behalf of their members.
“Despite the incredible job our sector has done to meet all the challenges of the COVID early release scheme, it’s clear that we still have our detractors in Canberra – our sector continues to be under heightened scrutiny and the pillars that make our system a success – preservation and compulsion, are under attack,” Ms Scheerlinck told the AIST Superannuation Investment (ASI) conference.
“Fuelled by the commentary from various members of the government that the coronavirus crisis had exposed structural weaknesses in the industry fund model, our sector has weathered widespread criticism on fund liquidity, unlisted asset valuations, the make-up of fund membership, and high fees.”
Ms Scheerlinck also noted that there are “plenty of investment opportunities” emerging from COVID-19 and that the superannuation sector has a “major role” to play in driving the recovery. Meanwhile, Industry Super Australia (ISA) has warned that the super guarantee will save the government $17 billion this year – a figure that will rise to $100 billion by 2058 – by removing dependence on the age pension.
“The detailed findings lay bare claims that super costs the budget more than it saves and strengthens the case for proceeding with the legislated rise promised by the Prime Minister and Treasurer,” said ISA chief executive Bernie Dean.
“It also shows compulsory super combined with a supplementary means-tested pension is the most efficient pathway for governments to meet community expectations about retirement incomes.”
The increase to the super guarantee has faced stiff opposition from the bipartisan Grattan Institute, which believes that there’s no economic case for the increase to 12 per cent and that any shortfall will be made up by the age pension – a claim that has been met with criticism from AustralianSuper chair Dr Don Russell.
“What our members are saying loud and clear is that they want a living standard that is not based on their replacement income just before they retire, but they want a retirement standard of living which is better than the pension and which is connected to what they see as what should consist of a reasonable living standard in retirement,” Mr Russell said.
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