Don’t mix education with super: ASFA
The Association of Superannuation Funds of Australia (ASFA) CEO Pauline Vamos has opposed a call by the Federal Government to allow former tertiary students to pay their HELP debts using their super accounts.
Vamos said that while she understands there is an issue with the collection of tertiary education debts, using super to fix an issue in another policy area like education is not good policy.
The comments come after Fairfax reported on a pre-budget submission by former policy advisor to Liberal senator Arthur Sinodinos John Adams, who said those over 30 can choose to use their super accounts to pay off their tertiary education debts.
With the average indexation rate of the HELP/HECS date standing at 2.6 per cent and the average return for the balanced option in super standing at 7 per cent, she added the financial equations between the two do not stack up.
"The bottom line is, if you take out $25,000 towards your HELP debt, by age 67 you can have $54,000 less in your super account," she said.
"Will it help or impact the equity of the system, because there are always equity issues when a concessional access or benefit only applies to a relatively small proportion of the community."
Vamos added that lower to middle income earners will be hit hardest by this.
Recommended for you
Australia’s superannuation funds are becoming a defining force in shaping the nation’s capital markets, with the corporate watchdog warning that trustees now hold systemic importance on par with banks.
Payday super has passed Parliament, marking a major shift to combat unpaid entitlements and strengthen retirement outcomes for millions of workers.
The central bank has announced the official cash rate decision for its November monetary policy meeting.
Australia’s maturing superannuation system delivers higher balances, fewer duplicate accounts and growing female asset share, but gaps and adequacy challenges remain.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
DomaCom DFS Mortgage
225.31 3 y p.a(%)
2
Loftus Peak Global Disruption Fund Hedged
120.73 3 y p.a(%)
3
Global X 21Shares Bitcoin ETF
72.47 3 y p.a(%)
4
Paradice Australian Mid Cap A
69.09 3 y p.a(%)
5
Global X Ultra Long Nasdaq 100 Complex ETF
61.94 3 y p.a(%)
