In one year’s time, Bill Shorten, the new Minister for Financial Services, aims to see new superannuation legislation signed into black letter law. He fleshed out an ambitious reform agenda – covering the push for a 12 per cent superannuation guarantee, to remove conflicted remuneration structures and restore consumer confidence in the system – in an exclusive roundtable convened by Investment Magazine and sponsored by Aberdeen Asset Management.
The centrepiece of Shorten’s reform agenda is fulfilling the Labor plan of boosting the SG to 12 per cent, and without a parliamentary majority, the Minister called on industry executives in the room to advocate an SG boost among their constituencies.
“Get out and talk to the people who get paid superannuation. It doesn’t matter if it’s a self-managed super fund, an industry fund, a retail fund, a public sector fund or a corporate fund. They will grasp the benefit of superannuation,” he said.
The reinvigorated adequacy debate summoned parallels with the 1985 union and Labor push to introduce super so that private savings plans were not exclusive to wealthy Australians, he said. Now, with a population lucky enough to be grappling with the costs of increased longevity, universal SG at 9 per cent may not be enough for many people.
But since these debates were normally enclosed within the industry – despite the real impacts that super has on most Australians – much of the public was unaware of the attractiveness of higher SG.
“You’ve got shareholders, you’ve got stakeholders. But at the end of those constituencies is the Australian people, and they reply upon the industry and government to ensure we have a system which can hopefully mean that when people – the people in our towns and cities, our own families – finish their 40–45 years of work they can retire adequately, and by that I mean have enough money.”
For the industry to successfully relay this message, it should overcome its divisions to agree on a unified position on adequacy, “so it’s not retail up against industry, but one industry,” said Marianne Perkovic, head of distribution at Colonial First State.
However Gerard Noonan, chair of the $2.6 billion Media Super and president of the Australian Institute of Superannuation Trustees, said the remuneration structures of many financial planning businesses still encouraged advisers to recommend retail funds over industry funds.