Superannuation Knowledge, Behaviour and Attitudes in Young Adults in Australia (original) (raw)
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Research Papers in Economics, 1991
Assets with superannuation funds represented the fastest growing of the major components of household wealth during the 1980s. This paper reviews the causes of that growth, and its effects on private saving and on the pattern of financial intermediation. It is found that the growth of superannuation funds during this period was mainly a result of the funds' high earnings rates; there was relatively little change in the net rate of new contributions by members. This fact makes it hard to argue that growth of the superannuation sector came at the expense of other types of financial intermediaries. The relative stability of members' contributions also helps to explain why superannuation has not yet had a noticeable effect on the level of private saving.
The Impact of Children on Australian Women's and Men's Superannuation
Economic and Labour Relations Review, 2007
Using data from Wave 2 of the Household Income and Labour Dynamics in Australia (HILDA) Survey, this article examines how superannuation savings by women and men vary according to the numbers of children they have. The results show that for women there is a clear inverse relationship between the value of superannuation and the number of their children. Moreover, this inverse relationship persists after controlling for an extensive range of variables which may affect both number of children and superannuation. The analysis also shows that level of education, migrant status, being an employer or self-employed, marital status, age and sex are significantly related to an individual’s level of superannuation. The implications of the results for Australia’s public debate and possible policy responses are discussed.
Superannuation policy processes: the case of MySuper and SuperStream
2013
The Australian superannuation system has been praised as one of the best in the world. Yet a major review by the Cooper Committee in 2010 found numerous problems that have been undermining the performance of the system, proposing a number of recommendations for improvement. The subsequent adoption and implementation of two such recommendations saw the introduction of 'MySuper' and 'SuperStream' by the government resulting in the most significant reform in the superannuation industry since the introduction of the Superannuation Guarantee (SG) in 1992. This paper critically analyses: the relevant Deloitte; and Financial Services Council and Ernst and Young's report used to support this major reform. It is concluded that the scope of these studies is limited and they are predominantly constrained to industry funds and are presented by interested players, limiting their ability for full representation. A call for independent academic research is made.
On Selection of Superannuation Fund: Impact of Choice and Information*
Economic Papers: A journal of applied economics and policy, 2012
Australia superannuation industry is an essential part of the three pillar retirement income policy with the first two pillars comprising of mandatory contributions and voluntary contributions. The contributors to superannuation schemes have significant control over their retirement assets with most having the choice of selecting a fund and their preferred investment option(s). However, many Australians remain disengaged from their superannuation plans and seem unaware of how their funds are performing. This study examined the best ways to present financial information to help young Australians make optimal decisions regarding their superannuation. Surveys were employed to present financial information on superannuation using four different models, experimenting with the display of fee, risk and return information. The overall results of the study highlight a number of interesting findings. First, where fee information was displayed affected fund selection as well as the reason for choosing the fund. Second, risk labels such as "medium risk" or "high risk" seemed to be more commonly relied upon than risk expressed as years of negative returns (risk probabilities). Third, employers appeared to be highly influential in fund selection. Finally, age seemed not to influence the fund or investment option selection. These findings have implications for regulators, fund managers, employers and superannuation fund members.
Informed Superannuation Choice: Constraints and Policy Resolutions
Economic Analysis and Policy, 2002
The latest controversy to emerge in Australia's ever-changing superannuation system is the failure of the proposed 'member choice of fund' legislation. While superannuation choice continues to be widely supported, the debate lacks coherent policy direction. This paper addresses the policy hiatus by developing a framework to systematically examine endogenous and exogenous constraints affecting the achievement of informed choice, members' choice preferences and associated policy resolutions. Applying this framework, we argue that a genuine choice of fund model should cater for active and passive choice, where passive choice applies to fund members who, for various reasons, are unwilling or unable to make active choices. Appropriate education programs and standardised disclosure are identified as critical prerequisites to enable informed choice by those members who want to actively participate in the management of their superannuation savings. To protect the interests of passive choice members, we suggest the option of a government-regulated universal default fund (UDF).
The Switching Decision: Are Members of Superannuation Funds Rational and Informed Investors?
Australasian Accounting, Business and Finance Journal, 2014
The recent Cooper Review (Cooper 2010) attempted to address governance, structure, efficiency and operational problems by recommending changes without pinpointing the root causes and systematic design flaws of the Australian Superannuation System. Despite overwhelming evidence that members' disengagement was a root cause of the problems, little attention was paid to the motivation and background of members to facilitate participation and decision-making. For instance, a very small percentage of members take their role in the superannuation industry seriously. This is evidenced by the fact that a very small percentage of members (2.5% in 2007) actively changed superannuation fund and most new fund members 'defaulted' into employer-selected funds (Bateman 2009). This may be that they are serious but lack the ability or time to monitor investments in a way required by a sophisticated system. This paper explores the drivers of switching superannuation funds of those working-age Australians. It also analyses the presentation of fund information to the sample population to examine how members use information in their superannuation decisions. This may add insight to the ways fund information is made available and also to the types of members who may need more protection, support or education.
Tax and Superannuation Literacy: Australian and New Zealand Perspectives
Political Economy - Development: Fiscal & Monetary Policy eJournal, 2016
The Australian and New Zealand governments both recognise the economic and social importance of building a financially capable population. In Australia this is recognised through the National Financial Literacy Strategy and in New Zealand through the National Strategy for Financial Capability.1 Both strategies define financial literacy (or capability) as the ability to make informed judgements and effective decisions regarding the use and management of money. One of the main aims of increasing the overall financial literacy of populations is creating an environment where consumers have the knowledge, skills and confidence to protect themselves from financial risk. It is argued that taxation consequences often play an important role in investment decisions and are also a major reason why people seek assistance and advice from professionals. Australian research has found that there are basic concepts of tax and superannuation that are important in the context of overall financial lite...
Australian superannuation: An unsustainable pyramid scheme?
Journal of Australian Political Economy, 2019
Equity purchases by Australian superannuation funds have the potential to stoke, and may already have stoked, an unsustainable asset bubble. While it is impossible to prove this - financial bubbles only reveal themselves after the event - it is clear that Australian superannuation funds fuel an asymmetrical development of equity markets rather than feeding real investment in the way advocates anticipated. Growing superannuation funds provide net money inflows, unmatched by new equity or rises in the level of 'real economy' activity represented by existing shares. Superfunds therefore raise the demand on secondary markets, pushing-up prices.