All in all, super is now often in the spotlight and, with another round of reforms and lower forecast returns, is likely to stay that way. Boomtown So back to the boomers, intergenerational equity and the longterm view. The recent report handed down by the Productivity Commission (PC), Caring for Older Australians, provides some glimpses of another aspect of our ageing population problem – separate from the usual, broader “how will we pay for our retirement?” question that the industry regularly discusses. To recount a couple of the key statistics: The number of citizens aged 65 or more is expected to increase from about 14 per cent of the population to 25 per cent by 2047. A larger relative increase is anticipated for the so-called “old old” – those aged more than 85 years of age – moving from about 1.7 per cent to 5.6 per cent of the population. People in this group tend to be the main users of aged care services. In plain numbers, there will be more than 7 million Australians aged 65 years or older by 2047, driving a burgeoning demand for aged care services supported by relatively fewer persons in younger cohorts to support the provision of these services, as working age taxpayers and as informal carers.

Since the release of the PC report, a range of potential solutions have been put forward to help make up the potential funding shortfall. Clear separation of the costs of accommodation from those of care is one measure that may make investment in the sector more attractive to both banks and super funds. This principle has already been adopted in some community care facilities and services. The report puts forward a range of options, including discrete, superannuation-style aged care savings accounts, long-term care insurance and the extension of the offerings of private insurance providers or those available through Medicare. Another suggestion is a mandatory annuity component of super, established upon retirement to help cover aged and health care costs. It is possible that super funds may end up with a significantly greater role in dealing with this intergenerational challenge than simply as an investment vehicle for members’ retirement savings? Many of their advice services are changing to specialise in navigating through the maze of regulations, costs, benefits and options within the current aged care system. Some funds already promote various health fund options, albeit as a minor member benefit.