Federal super blowout at $50bn

Original article by Geoff Chambers
The Australian – Page: 1 & 4 : 22-Oct-19

The Department of Finance has released data showing that the federal government’s unfunded superannuation liability topped $233.1bn at the end of 2018-19, compared with $183.1bn at the start of the financial year. Meanwhile, the Future Fund’s assets rose to $165.7bn in the year to September. The Future Fund Act allows the government to begin withdrawing money from the sovereign wealth fund in 2020 to meet unfunded super liabilities, although the Coalition has renewed a 2017 commitment to not do so.

CORPORATES
AUSTRALIA. DEPT OF FINANCE, AUSTRALIA. FUTURE FUND MANAGEMENT AGENCY, AUSTRALIA. OFFICE OF THE AUDITOR-GENERAL

Super fees twice as high for under 35s

Original article by Michael Roddan
The Australian – Page: 6 : 10-Oct-19

Rainmaker Information Services has released a report which shows that workers who are under the age of 35 pay an average fee of 2.3 per cent, compared with just 1.2 per cent for those aged 35+. The report also contends that male workers pay an average of 1.1 per cent in super fees, compared with 1.3 per cent for female workers. Alex Dunnin of Rainmaker stresses that super funds are not overcharging or ripping members off; rather, the super industry has not been designed with young workers and those with low balances in mind.

CORPORATES
RAINMAKER INFORMATION SERVICES PTY LTD, AUSTRALIA. DEPT OF FINANCE

Super fee gap shrinking as retail funds catch up

Original article by Joanna Mather
The Australian Financial Review – Page: 3 : 9-Oct-19

Data from Rainmaker shows that the superannuation industry’s fees fell by about four per cent in 2018-19, to $31.8bn. It was the first decline in fees since 2014, with retail super funds recording the biggest fall. Rainmaker notes that as a result, the traditional fee gap between retail and industry super funds has narrowed to almost zero. This is particularly so in the case of MySuper funds; the average fee for non-profit MySuper products is now 1.15 per cent, compared with an average of 1.17 per cent for retail MySuper products.

CORPORATES
RAINMAKER INFORMATION SERVICES PTY LTD

Brawl over voluntary super push

Original article by John Kehoe
The Australian Financial Review – Page: 1 & 4 : 30-Sep-19

SMSF Association chair Deborah Ralston was recently named as a members of the federal government’s review of the retirement income system. It has been revealed that Ralston wrote to Treasurer Josh Frydenberg in early July. Amongst other things, she suggested that compulsory superannuation contributions could become voluntary for people on low incomes and young workers, a proposal that has been criticised by Industry Super Australia chairman Greg Combet. Ralston also called for the abolition of tax concessions for large super balances and questioned the need to increase the super guarantee from 9.5 per cent to 12 per cent.

CORPORATES
SMSF ASSOCIATION, AUSTRALIA. DEPT OF THE TREASURY, MONASH UNIVERSITY, INDUSTRY SUPER AUSTRALIA PTY LTD, ACTU, ALLIANCE FOR A FAIRER RETIREMENT SYSTEM, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET

Cbus’ climate change quotas queried

Original article by Joanna Mather
The Australian Financial Review – Page: 8 : 6-Sep-19

Construction industry superannuation fund Cbus will allocate one per cent of its $52 billion worth of funds under management to climate change initiatives. Its decision has been queried by Senator James Paterson, who said that establishing quotas seems like a bad idea; Paterson is the chair of the Parliamentary Joint Committee on Corporations and Financial Services. Scott Donald, the director of the Centre for Law, Markets & Regulation at the University of New South Wales, says Cbus is not violating any laws by making such a decision.

CORPORATES
CONSTRUCTION AND BUILDING UNIONS’ SUPERANNUATION FUND, AUSTRALIA. JOINT COMMITTEE ON CORPORATIONS AND FINANCIAL SERVICES, UNIVERSITY OF NEW SOUTH WALES

Self-managed funds defy the big industry players

Original article by Robert Gottliebsen
The Australian – Page: 26 : 30-Aug-19

Australia has around 590,000 self-managed superannuation funds, with assets under management totalling $747 billion. This puts the SMSF sector ahead of both industry super funds ($718 billion) and retail super funds ($625 billion) in terms of size. Despite both industry and retail funds having forecast the demise of the SMSF sector for some time, figures released by the SMSF Association show that almost 30 per cent of new SMSFs have trustees (members) between the ages of 35 and 44. Given the revelations of the Hayne royal commission, it is not surprising that many SMSF members do not trust the big super funds.

CORPORATES
SMSF ASSOCIATION, AMP LIMITED – ASX AMP

Bring global giants to heel on tax

Original article by Olivia Caisley
The Australian – Page: 5 : 1-Aug-19

Labor senator and former union official Tony Sheldon says the federal government should follow the example of other nations and ensure that multinational companies pay their "fair share" of tax in Australia. Sheldon also used his maiden speech in parliament to urge the government to take action to ensure that gig economy workers are entitled to superannuation and a fair rate of pay.

CORPORATES
AUSTRALIAN LABOR PARTY, FACEBOOK INCORPORATED, AMAZON.COM INCORPORATED, UBER TECHNOLOGIES INCORPORATED, GOOGLE INCORPORATED, FOODORA AUSTRALIA PTY LTD, DELIVEROO AUSTRALIA PTY LTD, TRANSPORT WORKERS’ UNION

Revealed – the worst default super funds

Original article by Joanna Mather
The Australian Financial Review – Page: 5 : 19-Jul-19

Industry Super Australia’s analysis of data from the Australian Prudential Regulation Authority shows that Hostplus and Cbus are among the MySuper funds that have delivered the best returns over the last five years. However, Max Super is the only retail fund in ISA’s list of the 20 best-performing MySuper funds. The super funds of the Commonwealth Bank and Westpac are among the MySuper funds that delivered the lowest returns over the period.

CORPORATES
INDUSTRY SUPER AUSTRALIA PTY LTD, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, HOST-PLUS, CONSTRUCTION AND BUILDING UNIONS’ SUPERANNUATION FUND, MAX SUPER PTY LTD, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIANSUPER PTY LTD, SARGON, BLACKROCK INVESTMENT MANAGEMENT (AUSTRALIA) LIMITED, AUSTRALIA. PRODUCTIVITY COMMISSION

Super funds post solid returns, but challenging times ahead

Original article by Samantha Bailey
The Australian – Page: 17 & 27 : 18-Jul-19

Data from Chant West shows that the median growth superannuation fund achieved a return of seven per cent in 2018-19. QSuper and UniSuper delivered the best return, at 9.9 per cent apiece, followed by Media Super and AustralianSuper with returns of 8.8 per cent and 8.7 per cent respectively. Growth funds have averaged a return of 8.8 per cent per annum over the last decade, but Ian Fryer and Mano Mhankumar of Chant West warn that the sector faces headwinds and investors should not expect such returns to be sustained. However, Fryer says it is important to note that super is a long-term investment.

CORPORATES
CHANT WEST FINANCIAL SERVICES PTY LTD, QSUPER LIMITED, UNISUPER LIMITED, MEDIA SUPER LIMITED, AUSTRALIANSUPER PTY LTD, HOST-PLUS, SUPERRATINGS PTY LTD

Big super ready to fund infrastructure

Original article by Joanna Mather
The Australian Financial Review – Page: 7 : 9-Jul-19

IFM Investors CEO Brett Himbury has argued the case for industry superannuation funds to invest in public infrastructure, saying they are prepared to buy into both new and existing assets. Himbury concedes that there is still some concern about the partial sale of public assets; however, he stresses that unlike some private investors, super funds are focused on long-term returns rather than short-term profits. Former ACTU secretary Bill Kelty has proposed the creation of a new government-backed asset class that is focused on infrastructure.

CORPORATES
IFM INVESTORS PTY LTD, ACTU, INFRADEBT PTY LTD