“This is something which people, unfortunately, don’t realise. How many members of the population will end up with $20,000, $30,000, $50,000 maybe max, in their superannuation thing, even if it goes up. It will make a small difference to their retirement. It will not save the money – save money in the pension system – because they will be getting full pensions in most of those cases? And it will actually be a grossly inequitable system, and I just think we do need to be serious and think about that.”

Jeremy Cooper, chairman, retirement incomes, at Challenger, says compulsion is a critical part of why the Australian superannuation system has succeeded to date, and why it will continue to succeed.

“We tend to put things off, we tend to delude ourselves about how expensive retirement is, and when it’s actually going to happen, it’s a great thing that we’ve got compulsion,” he says.

“There are always school shoes, and other budgetary pressures on people and, certainly at low income levels, there is a view that traditional welfare takes over from compulsory savings or private savings, as you will. But we’ve got to remember how important that compulsion is – at the moment, in the UK they’re going through all sorts of tangles to try to come up with a sort of a quasi compulsory system, a sort of so-called ‘auto-enrolment’, and soft compulsion ideas, and I think that will be a pale imitation compared to our system, because, of course, people are allowed to opt out of it, and those very day-to-day budgetary pressures are often what force people to do that.”

Cooper says it’s important to continue to seek efficiencies, so that the benefits of raising the SG are not lost to unnecessary charges and other drags.

“I mentioned in the beginning that I supported the 9 to 12 [per cent] on conditions – the conditions, fortunately, are ones that the Government is going for, and SuperStream will be one.

“It became very clear to us that the back office of super was not efficient. Many experts told us it was wasting around about a billion dollars a year in needless reprocessing and using paper and so on. And the SuperStream measures address that, and the Government has said that it will implement those.

“So, that’s a tick. The other one, I think, is improving the base model, if you like, of superannuation – that’s the MySuper idea. Again, the idea behind that was efficiency, and in a compulsory system I think the Government owes the people who are forced to contribute to the system a degree of efficiency – and again that’s being embraced.

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