RMIT expert available for comment on adequacy of super

RMIT expert available for comment on adequacy of super

An expert from RMIT University is available to talk to media about the adequacy of super, which is once again being thrown into doubt.

Associate Professor Banita Bissoondoyal-Bheenick (0412 588 210 or banita.bissoondoyal-bheenick@rmit.edu.au)

Topics: investment options in superfunds, risk and return, longevity risk, early release of super.

“The adequacy of the Australian superannuation Guarantee is once again in the spotlight. The super guarantee is set to rise to 12% in 2025 at a rate of 0.5 percentage points a year from July.  Now in a new twist, the 0.5% increase is to go ahead in July but the remaining amount up to 12% would be optional.

“The question is does this really alleviate the pressure in the economy or does it further put pressure on the economy over the longer term?

“Are we not questioning the whole basis and existence of the Superannuation system which is meant to be “compulsory” and more importantly “longer term”?

“We are simply digressing from the reason why superannuation was actually set up, that is to cater for retirement and alleviate the pressure and reliance on the old age pension and hence the economy. 

“What we already know is that unless we work longer, or contribute more, the superannuation balance of most people is likely to be inadequate to support them in retirement. The Australian superannuation industry is a long way from being able to deliver retirement incomes that will offer retiring Australians a modest, let alone a comfortable, income throughout their retirement. 

“The obstacles list is long, including for those who have had periods of unemployment during COVID, and experienced redundancy; for women who have spent time out of the work-force raising children, while receiving no contribution for this work, and are mostly on a lower pay rate than their male counterparts; and for the majority of us who face the risk of longevity and a rising cost of living and care as we age.

“Hence, the focus should be on economic recovery and increased productivity rather than making us reduce our retirement savings to fund our own pay rise.”

Associate Professor Banita Bissoondoyal-Bheenick is an Associate Dean of Finance in the School of Economics Finance and Marketing at RMIT University. Her research focuses on the investment options and member benefits of the Australian Pension System. She equally works on stock market return and volatility.

 

***

For media enquiries, please contact RMIT Communications: 0439 704 077 or news@rmit.edu.au

27 January 2021

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27 January 2021

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