New research from Challenger questions whether the superannuation industry is using the appropriate metrics and analysis frameworks to assess data of its members.
Challenger’s chairman, retirement income, Jeremy Cooper this week called on the superannuation industry to view and analyse super from a household perspective, instead of an individual level.
For example, if super balances are looked at from a household view, pre-retirees have higher balances than commonly thought, pooling approximately $423,000.
“Over 75 per cent of pre-retirees are not living alone, therefore they pool their resources to meet their combined expenses,” Mr Cooper said.
Looking at super from a household perspective will give more accurate indications of how Australians are faring in terms of their preparedness for retirement, according to Challenger’s research.
Another issue of viewing superannuation through an individual prism lies in the fact that many Australians have more than one superannuation account.
The ATO estimates that 45 per cent of people with super have more than one account.
According to APRA, there were almost 30 million accounts at June 2015, significantly more than the 19 million Australians aged 15 or over at the time.
These points give rise to several important questions for the superannuation industry, and questions the accuracy of the data they are using when considering “optimal retirement outcomes” for members, Challenger said.
“Are they looking at raw data that include multiple accounts across the pre-retiree cohort or are they looking at consolidated data that might paint a materially different picture of the super wealth of pre-retiree members?” Challenger said, referring to APRA-regulated funds.
“Do they have the data, advice network and technology to find out whether pre-retirees are planning to approach retirement alone or as part of a household and to measure their combined non-super financial wealth? If the answer to any of these questions is in the negative, the fund might be misreading the financial position and needs of their pre-retiree and retiree members.”
SUBSCRIBE TO THE SMSF ADVISER BULLETIN
- 17 Aug 2017Industry questions ATO’s capacity for new reportingBy Miranda Brownlee
- 17 Aug 2017Qld succession law changes tipped to impact SMSFsBy Miranda Brownlee
- 16 Aug 2017Contribution limits restricting future balances, warns mid-tierBy Staff Reporter
- 16 Aug 2017SMSF firms underprepared for events-based reportingBy Miranda Brownlee
- 15 Aug 2017SMSF auditor disqualified for misconductBy Staff Reporter
- 15 Aug 2017Class gains market share in financial year resultsBy Staff Reporter
- view all
- Industry questions ATO’s capacity for new reporting
With events-based reporting set to generate huge amounts of data, concerns have been raised about whether the ATO’s systems will be able t...read more
- Contribution limits restricting future balances, warns mid-tier
Clients hoping to accumulate a superannuation balance of $1.6 million by age 65 will need to start taking full advantage of concessional con...read more
- SMSF firms underprepared for events-based reporting
A straw poll has revealed that the majority of SMSF firms currently feel their firm is not equipped to deal with the proposed events-based r...read more
- view all