POWERED BY MOMENTUM MEDIA
Super fund members not interested in reverse mortgages
At least one major superannuation fund has actively canvassed its members about their level of interest in in reverse mortgage products and found little interest exists.
Questions asked by an advocate of people being able to access superannuation for first home deposits, House of Representatives Standing Committee on Economics chair, Tim Wilson, elicited a negative response from big NSW fund, Aware Super, formerly First State Super.
Asked by Wilson whether the fund had ever completed internal research that included retirement outcomes for fund members who own their home in retirement, compared to those that do not, Aware Super confirmed that at least some research had taken place.
“We have conducted internal actuarial analysis of the retirement outcomes for home-owning versus non-homeowning retirees and referenced the different outcomes in our submission to the Retirement Income Review,” it said. “For this we used data about our members’ balances compared with the Association of Superannuation Funds of Australia (ASFA) Comfortable Standard for homeowners and non-homeowners.
“These models are regularly updated.”
“We conducted focus group surveys of members in 2016 to test, amongst other things, their interest in either equity release or reverse mortgage products, but have not commissioned external research on outcomes,” the super fund said.
“The focus group results showed members had little interest in, or demand for usage of home equity or reverse mortgages. Most respondents were ambivalent, and reluctant to incur additional debt even where members over age 55 could see there might be benefit.”
Recommended for you
Jim Chalmers has defended changes to the Future Fund’s mandate, referring to himself as a “big supporter” of the sovereign wealth fund, amid fierce opposition from the Coalition, which has pledged to reverse any changes if it wins next year’s election.
In a new review of the country’s largest fund, a research house says it’s well placed to deliver attractive returns despite challenges.
Chant West analysis suggests super could be well placed to deliver a double-digit result by the end of the calendar year.
Specific valuation decisions made by the $88 billion fund at the beginning of the pandemic were “not adequate for the deteriorating market conditions”, according to the prudential regulator.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
Spire Oaktree Opportunities XI Second Close
61.07 3 y p.a(%)
2
Spire Oaktree Opportunities XI First Close USD
59.21 3 y p.a(%)
3
DomaCom Lot 21 Chellaston Road Munno Para West SA 5115 Australia
31.56 3 y p.a(%)
4
Fidante Credit Suisse Global Private Equity
31.06 3 y p.a(%)
5
DomaCom 4/27 Crombie Avenue Bundall QLD 4217 Australia
26.81 3 y p.a(%)
Only when the value of the family home, TOTAL WEALTH is taken as a mandatory prerequisite in the qualification for the welfare based Age Pension will Superannuation Retirement income become important and then “only” REVERSE MORTGAGES will be brought into prominence because due to modern medical advances life expectancy is steadily increasing.
Ignoring the value of the family home TOTAL WEALTH the fall back position is the welfare based Age Pension and the value of the family home distorts the tax free inter generational transfer of wealth.