Financial Tools
  Client Portfolio Access
  New Client Kit
  Enquiry / Seminar Registration
Hot Issues
Market Update – April 2015
An investor's personal trainer
Budget 2015 - some professional opinions
Australian Government - Budget 2015
What does the ATO want from you?
Making sense of the new excess contribution rules
Greying, working and contributing
Simple-yet-smart investment housekeeping
Market Update – March 2015
Customer-centred innovation underpins high satisfaction among financial advice customers
Two sides to the age profile of SMSF members
Actuaries call for end to superannuation policy tinkering
ATO urges caution on pensions
Market Update - February 2015
Aussie economy shifts gears as structural changes take hold
The catch 22 of retirement savings
Are there reasons to help the tax man do his job?
Some financial terms explained
Small business paradox
Good financial planning finally has a value: 23% more income in retirement
Market Update - January 2015
Articles archive
Quarter 1 January - March 2015
Quarter 4 October - December 2014
Quarter 3 July - September 2014
Quarter 2 April - June 2014
Quarter 1 January - March 2014
Quarter 4 October - December 2013
Quarter 3 July - September 2013
Quarter 2 April - June 2013
Quarter 1 January - March 2013
Quarter 4 October - December 2012
Quarter 3 July - September 2012
Quarter 2 April - June 2012
Quarter 1 January - March 2012
Quarter 4 October - December 2011
Quarter 3 July - September 2011
Quarter 2 April - June 2011
Quarter 1 January - March 2011
Quarter 4 October - December 2010
Quarter 3 July - September 2010
Quarter 2 April - June 2010
Quarter 1 January - March 2010
Quarter 4 October - December 2009
Quarter 3 July - September 2009
Quarter 2 April - June 2009
Quarter 1 January - March 2009
Quarter 4 October - December 2008
Quarter 3 July - September 2008
Quarter 2 April - June 2008
Quarter 1 January - March 2008
Quarter 4 October - December 2007
Quarter 3 July - September 2007
Quarter 2 April - June 2007
Quarter 1 January - March 2007
Quarter 4 October - December 2006
Quarter 3 July - September 2006
Quarter 2 April - June 2006
Quarter 1 of 2011
Uninformed and impatient
Perspective on the tragedy in Japan.
The essentials of Corporate cash flow.
Out in the cold (the self employed)
Some terminology explained.
Market Updates - February / March 2011
Improving financial literacy is an objective we should all have.
Why baby boomers face a super sprint
Don't buy yet - first calculate the stock's P/E and PEG ratio
SMSFs:  Age matters
Some more terminology explained
Market Updates  -  January / February 2011
Secure File Transfer
CPI won't stop rate rises, says Economist
Super contender
Super birthday ahead
Some terminology explained
Market Updates -   December / January 2011
Super birthday ahead

By Robin Bowerman
Smart Investing
Principal & Head of Retail, Vanguard Investments Australia
6th January 2011

Next year, the superannuation contribution guarantee (SG) scheme will turn 20. And Smart Investing is getting in very early to mark this momentous occasion for Australian superannuation.

The great achievement of the SG scheme has been to extend superannuation coverage to the vast majority of the employed workforce.

Certainly, there are still considerable gaps in superannuation coverage among working Australians - principally the self-employed who have not made their own super arrangements.

Certainly superannuation savings are still, on average, grossly inadequate, as starkly pointed out in the Superannuation Savings Gap report, compiled by Rice Warner Actuaries for the Financial Services Council. (The latest report was published in October last year.

The inadequacy of women's average super savings remains a burning issue. And a tremendous challenge for Government and the financial services industry (including super funds and financial planners) is to convince today's fund members that SG contributions alone are insufficient to provide a sufficient retirement income - even taking the age pension into account.  

The ABS reports that the average super balance in 2007 of fund members aged 55-64 years - in other words, those in the final decade before retirement or on the eve of retirement - was only $142,000.

When the SG celebrates its 40th birthday in 2032, most fund members retiring around that time would have had SG cover for their entire working lives.

And the SG scheme combined with the rapid ageing of the population means that post-retirement super savings would have greatly expanded.

It's interesting that Rice Warner's latest Superannuation Market Projections report forecasts that the market share of post-retirement super assets held by industry funds will rise from 5.2% today to 21.5% within 15 years.

This point regarding industry funds is highlighted here because industry funds, of course, have been tremendous beneficiaries of both award super (introduced in 1986) and the SG system six years later. Award super had triggered a tremendous spurt in super coverage among the Australian workforce.

A growing proportion of industry fund members are nearing or in retirement - much depending upon a fund's membership demographics.

As the SG scheme continues to mature with the ageing of the population, there will be increasing focus on the provision of retirement incomes. Expect this to be one of the key issues for discussion in 2011 and beyond.


  Financial Advisor | Financial Planner | Financial Adviser | Financial Planning | Financial Planner Sydney