The Aged Care Act, achieved with rare political cooperation, will put residential and home care on a more sustainable basis with individuals’ contributions more closely attuned to their financial position.
When Labor first introduced its legislation to increase the tax burden on 80,000 superannuants, it seemed plain sailing. Now, with opposition spreading across the community to small businesses, farmers, retired judges, public servants and venture capitalists, its passage through the Parliament is looking increasingly unlikely.
Many seniors disengaged from their retirement savings: CFS report
Research showing that one in two Australians are not engaged with their superannuation and have put it on auto pilot is a damning indictment of the industry’s inability to relate to the millions of fund members.
What should particularly concern these superannuation funds is that about one-third of the more than 2,000 consumers surveyed for this Colonial First State (CFS) report are approaching or are in retirement.
While it’s more understandable that superannuation is not top of mind for younger fund members in the early accumulation stage, it’s disturbing to think that a sizeable percentage of this older cohort are still disengaged from their superannuation with the report also finding that most fund members are unsure how their fund performed last year.
It also found that a significant number of fund members do not feel confident making decisions about their superannuation, despite appreciating the importance of choosing the right option.
To quote the report, “confusion and uncertainty are the core drivers of this national disengagement, with two in five Australians admitting they find superannuation confusing and the majority (60 per cent) unsure how their super performed last year”.
More than one in three Australians (37 per cent) say that their superannuation doesn’t feel like their money – a number that includes the older cohort. For those aged under 40, this number jumps to 49 per cent.
Colonial First State chief executive officer (superannuation) Kelly Power says the findings are a wake-up call for the industry.
“Australia is the envy of the world for its superannuation system, which manages almost $4 trillion for millions of Australians. For so many people to feel confused, uncertain and disengaged with their super should be deeply concerning to the industry,” Power said.
“As an industry we need to do more to demystify superannuation and drive engagement so that more Australians feel confident making decisions about their financial future.”
Encouragingly, seven in 10 Australians recognise that staying on top of their superannuation is key to growing their wealth and two in three (65 per cent) acknowledge that they need to actively choose the right options to get the most out of their retirement savings.
However, confusion over investment performance prevents many from making decisions, with two in five saying they get stuck when trying to compare the performance of different funds.
This confusion is creating inertia: almost half of all Australians (44 per cent) don’t regularly monitor their superannuation’s performance and more than a third (36 per cent) rarely check their balance.
That this incudes people nearing or in retirement reflects badly on their superannuation funds that, in many cases, are still struggling to come to terms with the fact many of their members are either transiting to retirement or are in retirement.
“In a year where the difference between the top performing MySuper fund and the worst was more than five per cent, knowing how to compare your fund with others is essential,” Power says.
