Retirement
Compulsory super has ‘failed Australians’
The superannuation system has failed the Australian workers it is intended to serve, according to Peter Costello, who has called out a major flaw of the system while considering the need for reform to the sector.
Compulsory super has ‘failed Australians’
The superannuation system has failed the Australian workers it is intended to serve, according to Peter Costello, who has called out a major flaw of the system while considering the need for reform to the sector.
Speaking at the Citi annual investment conference, the former commonwealth treasurer said the major mistake that was made on introduction of a compulsory superannuation system in Australia was that everybody thought about putting the money in “but there wasn’t a lot of thought given to how it would be managed once it was in these funds and how it would come out”.
After nearly 30 years of use, Mr Costello said, “We realise [now] that fees were extraordinarily high, some of the products were no good, and at the end of all this, when you get your entitlement, there’s still this huge gap as to ‘what do I do now?’”
The former treasurer flagged that for anyone with sizeable sums in a superannuation fund who is looking to retire, if they decide to take out the lump sum, they have to invest it all over again.
“You’re at that stage of your life where you are trying to wind down and you don’t really know what to do with it, and I think this is where we’ve failed Australians.”
“We haven’t had the right exit products, we haven’t had the ability to move between funds as easily as we should have and we haven’t had fees as low as they should be,” he said.
Mr Costello said he has advocated for a government default fund, but he isn’t sure whether it’s something that the current government would consider.
A government default fund, he explained, “would be a catch-all fund for people who don’t choose to join another superannuation fund, which could provide a basic investment product at very low rates”.
“Now whether that’s of appeal to the government or not, I don’t know – but there are a lot of people out there that are falling between the cracks, a lot of people out there who have multiple funds, [and] a lot of people out there that are paying a lot more in fees than they should be paying.”
RELATED ARTICLES
About the author
About the author
Superannuation
Survey reveals Australians' reliance on superannuation for retirement
A new survey by AustralianSuper has found that only 32% of Australians believe they could save for retirement without compulsory superannuation. Read more
Superannuation
AMP launches national campaign to boost super engagement
AMP has unveiled a new national advertising campaign aimed at encouraging Australians to engage more actively with their superannuation. Read more
Superannuation
AustralianSuper urges action on gender pay gap for Equal Pay Day
AustralianSuper, Australia's largest superannuation fund, is calling for increased focus on the gender pay gap and its long-term impacts on women's retirement savings this Equal Pay Day, August 19. Read more
Superannuation
AMP advisers focus on super contributions and home ownership queries
Financial advisers are prioritizing assistance with superannuation contributions, transfer balance caps, death benefits, and home ownership issues, according to recent data from AMP Advice. Read more
Superannuation
Aware Super reports strong 11.02% return for flagship investment option
Aware Super, one of Australia's largest superannuation funds, has announced an 11.02% return for its High Growth accumulation option in the 2024 financial year. Read more
Superannuation
Retirement savings strategies: How to boost your superannuation
Superannuation is a pivotal part of retirement planning in Australia, offering a tax-effective way to save for your later years. As you navigate through your working life, enhancing your ...Read more
Superannuation
Aware Super takes on Australia's gender retirement gap, aiming for financial equality
Aware Super, one of Australia's largest superannuation funds with a 70 per cent female membership, is on a mission to close the gender gap that sees women retire with 30 per cent less super than men ...Read more
Superannuation
Age Pension increase prompts Australians to review their finances
The increase in the Age Pension, which takes effect today, should serve as a prompt for many older Australians to ensure they're maximizing their income as cost-of-living pressures persist, according ...Read more
Superannuation
Survey reveals Australians' reliance on superannuation for retirement
A new survey by AustralianSuper has found that only 32% of Australians believe they could save for retirement without compulsory superannuation. Read more
Superannuation
AMP launches national campaign to boost super engagement
AMP has unveiled a new national advertising campaign aimed at encouraging Australians to engage more actively with their superannuation. Read more
Superannuation
AustralianSuper urges action on gender pay gap for Equal Pay Day
AustralianSuper, Australia's largest superannuation fund, is calling for increased focus on the gender pay gap and its long-term impacts on women's retirement savings this Equal Pay Day, August 19. Read more
Superannuation
AMP advisers focus on super contributions and home ownership queries
Financial advisers are prioritizing assistance with superannuation contributions, transfer balance caps, death benefits, and home ownership issues, according to recent data from AMP Advice. Read more
Superannuation
Aware Super reports strong 11.02% return for flagship investment option
Aware Super, one of Australia's largest superannuation funds, has announced an 11.02% return for its High Growth accumulation option in the 2024 financial year. Read more
Superannuation
Retirement savings strategies: How to boost your superannuation
Superannuation is a pivotal part of retirement planning in Australia, offering a tax-effective way to save for your later years. As you navigate through your working life, enhancing your ...Read more
Superannuation
Aware Super takes on Australia's gender retirement gap, aiming for financial equality
Aware Super, one of Australia's largest superannuation funds with a 70 per cent female membership, is on a mission to close the gender gap that sees women retire with 30 per cent less super than men ...Read more
Superannuation
Age Pension increase prompts Australians to review their finances
The increase in the Age Pension, which takes effect today, should serve as a prompt for many older Australians to ensure they're maximizing their income as cost-of-living pressures persist, according ...Read more
