SG increase would cost less than Grattan claims
Raising the superannuation guarantee (SG) to 12 per cent, as advocated by most of the super industry, would cost less than the Grattan Institute has claimed, Rice Warner believes.
The research house said that raising the SG to 12 per cent would cost less than expected, hitting out at claims by the Grattan Institute that it would cost the average worker $30,000 were “sensational”.
“In fact, [Grattan’s] analysis has less to do with the SG level, but is more about the issues of means-testing of the Age Pension, which we have documented in detail and which will be described more fully in an Actuaries Institute Green Paper on retirement to be released in the next month,” Rice Warner said.
It would also cost less in the sense that it would improve investment returns for super funds, as, according to Rice Warner, professional management of pooled savings produced higher returners than would be achieved were funds privately invested, and build up Australia’s capital markets. The consultancy noted that this was particularly beneficial as the nation had “an infrastructure backlog and a technology deficit”.
Further, a higher SG of 12 per cent would improve more people’s position in retirement and had the advantage of reducing long-term age pension costs by to two per cent of GDP by the turn of the century.
Raising the SG wouldn’t do much to help high income earners, but rather lower and middle-income earners as the SG is not paid on income above $221,080 a year and concessional contributions are capped at $25,000 a year.
Recommended for you
Australia’s largest super fund, AustralianSuper, has announced multiple additions to its executive leadership team to focus on global growth and innovation.
Super Review rounds up last month’s biggest people moves in the superannuation industry, including a new fund chair and a private markets head.
Investment returns for the Future Fund hit a milestone in September, adding $200 billion in value for the first time ever.
Australia’s largest super funds have deepened private markets exposure, scaled internal investment capability, and balanced liquidity as competition and consolidation intensify.
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(%)
