Australia’s superannuation system would improve if it looked to overseas public-private DC models, according to a world authority on pension plans.

Roger Urwin, global head of investment content at Towers Watson, said the “moderately successful” systems in Sweden and Singapore had done much to address the problems that were emerging in Australia’s system.

“Australia’s system has a lot of costs which are a drag on performance,” Urwin said, speaking exclusively with I&T News.

“”There’s too much optimism in the alpha industry, and this is unsustainable. The alpha costs are a drag-anchor which carry a lot of cost with little benefit to members.

“Too many funds are pursuing alpha with unrealistic expectations and too many products,” he said.

The second problem locally was the orientation to see success through a prism of peer groups, rather than achievement of significant real returns for members, Urwin said.

Urwin’s latest paper on DC funds is at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1652680