Stay updated with breaking news from Asfa. Get real-time updates on events, politics, business, and more. Visit us for reliable news and exclusive interviews.
Senator Jane Hume says her greatest frustration is the disconnect between what she is being told by superannuation funds and what she is being told by industry bodies.
The financial planning industry will start working together to allow those currently excluded from getting advice to be included and the fear of providing complaint advice will dissipate, according to a panel.
In its pre-Budget submission, it has recommended changes to the low-income superannuation tax offset, as well as improvements to how the superannuation guarantee is dealt with.
“However, it was an extreme event and allowing people to access super in times of financial distress has helped a number of households. “When I think about the liquidity impacts, obviously timing is everything and a lot of super funds were seeing switching to lower risk options which created liquidity demands, they were seeing falling Australian currency which created liquidity demands on their hedges, and in addition to having early release on top it obviously added to that liquidity stress to funds.” Sawtell-Rickson said now the challenge was investment strategy. “As we think about the future, if early release is now a new tool that is available and likely to be used in the most extreme situations when markets are likely to be in stress, suddenly we need to think about our liquidity budgeting differently,” she said.
“There’s been a 10% increase in labour productivity in the last eight years and not a cent has gone to wages and the point about the SG, which is legislated, is 2.5 percentage points of wages. “Ten percentage points of labour productivity has gone to balance sheets. Really what the SG is saying is can we have 2.5% of 10% back and if that 2.5% is not paid then working Australians will have no real wage growth at all. “If working people were to lose the legislated 2.5% they get none of the productivity.” Keating noted that those that believed increasing the SG would impact wage growth were confusing an old argument and that economics was a science that changed over time.
“I’m not denying there is a trade-off between these two things but what I object to is the only thing on the table is to stop the 2.5% super guarantee increase with no guarantee of anything. “If the SG guarantee does not go ahead there will be no increase in super, missing out on hundreds of thousands of dollars in retirement, and no wage increase. There won’t be a trade-off for a senior exec in a financial services firm but if you’re a hotel cleaner on minimum wages they suffer the most as they miss out on increase in super and wage increase under proposition put forward.”
The Association of Superannuation Funds of Australia (ASFA) has called for the removal of the controversial transfer balance cap in its proposal to improve the equity of the superannuation system.
On the eve of a major superannuation conference, the Australian Securities and Investments Commission has reminded superannuation fund trustees the degree to which they will be playing by the same rules as the financial planning industry.
‘No justification for overreach’: ASFA Lachlan Maddock 14 January 2021 The Association of Super Funds of Australia (ASFA) believes that the Morrison government should consider the findings of the royal commission before instituting sweeping super reforms. ASFA believes that the low level of misconduct uncovered by the royal commission means that the government should rethink its approach to instituting the Your Future, Your Super reforms, while agreeing with the changes in principle. “ASFA supports the objective of ensuring good governance of super funds and addressing underperformance. It is important, however, that the performance of Australian superannuation funds is put into perspective,” ASFA said in its submission to Treasury.