Productivity Commission – Superannuation, Not So Super

Productivity Commission Draft Report into Superannuation: Assessing Efficiency and Competitiveness

For a long time I have said that superannuation in Australia is not fit for purpose.  It is my personal opinion that superannuation will not give people the retirement lifestyle they have been promised for all those years.

And you just have the read the first words in the Key Points section of the Productivity Commission Draft Report “Superannuation: Assessing Efficiency and Competitiveness” released today to see this highlighted again.

In the Productivity Commission own words “Australia’s super system needs to adapt to better meet the needs of a modern workforce and a growing pool of retirees. Currently, structural flaws — unintended multiple accounts and entrenched underperformers — harm a significant number of members, and regressively so”.

And some of their findings include:

• Fees remain a significant drain on net returns.
• A third of accounts (about 10 million) are unintended multiple accounts. These erode members’ balances by $2.6 billion a year in unnecessary fees and insurance.
• Not all members get value out of insurance in super. Many see their retirement balances eroded — often by over $50 000 — by duplicate or unsuitable (even ‘zombie’) policies.
• Fixing these unintended multiple accounts and entrenched underperformers could benefit members to the tune of $3.9 billion each year.

The Productivity Commission then goes onto say “Inadequate competition, governance and regulation have led to these outcomes”.

So until more changes are made to the industry, superannuation will remain not fit for purpose for a lot of Australians.

If you want more tips and ideas of how to improve the health of your wealth and get off the treadmill of working till you drop, why not join my meetup group and get notice of my upcoming live and free events.  Simply click below.

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Do you and your family a favour and start taking steps so you can improve the health of Your Wealth and get off the treadmill of working till you drop.

Wayne Wanders

The Wealth Navigator

wayne@thewealthnavigator.com.au

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