It’s both a puzzle and a source of frustration to many in the superannuation industry that the average Australian has so little interest in their superannuation.
We all recognise that retirement is a long way off for most people and that many households are more concerned with paying next month’s mortgage than reading about the benefits of compounding investment returns. Yet it remains an enigma how something with the potential to become one of the most, if not the most, significant financial asset in so many people’s lives can be so poorly understood and even mistrusted.
Recent AIST-commissioned research into Australian attitudes to super – the results of which were released at our March Conference of Major Superannuation Funds – highlighted many of the myths and misconceptions that surround retirement and super. The survey suggested that a disturbing number of Australians knew little or nothing about their super and nearly three quarters of respondents were worried that they wouldn’t have enough super to retire. Few read the reports sent to them from their super fund and there was widespread uncertainty about whether the rules of super would again be changed. One third of respondents said they didn’t feel that super was really their own money.
Such comments sit uncomfortably with some super funds who have worked hard at engaging their members through creative marketing campaigns, educational programs and workplace visits. The message is being heard, but perhaps not as loudly, or clearly, as many of us would like to think. Paradoxically, media interest in super has arguably never been greater. In the past few months, AIST has fielded media enquiries on a diverse range of issues – from climate change and short-selling through to questions on early-release super, the role of the representative trustee system and our concerns about the structure of the Government’s proposed first home buyers saving scheme.
Lately, of course, the media’s focus has centred squarely on the turmoil in global financial markets. Suddenly, even the hosts of afternoon radio chat shows want to know about super and the extent to which the sharemarket fallout will impact on fund returns. Many in the super industry are no doubt concerned that headlines such as “Super funds to record the worst performance in 20 years” and “Carnage to wipe out super fund gains” will make the challenge of selling super to the Australian public even tougher.
Reflecting on the sharemarket performance over the past few years, it’s clear that super funds have had a golden run. But the news isn’t all bad. There’s some indication that the recent sharemarket volatility is drawing people’s attention to their super and may lead to more people making extra contributions.