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The Forum > Article Comments > Top ten problems with our super system, and how to fix them > Comments

Top ten problems with our super system, and how to fix them : Comments

By Trish Power, published 11/8/2009

The major flaw with Australia’s super system is that you need to be male, always in work, not change jobs, not divorced, not sick ...

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Here is a suggestion. Why don't we put Trish Power on the Review Committee!
Posted by bookman, Tuesday, 11 August 2009 12:38:03 PM
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An awesome piece of work.

The detail of the superannuation system has always been open to manipulation by successive governments, and to exploitation by agents on commission.

Straightening out the system so that it is fair to all, transparent in its operation and immune from political tinkering every second Tuesday is a truly Herculean task. (I have the Augean stables in mind, given the amount of .... in the system)

I can only wish the author well in her endeavours, although I should point out one small detail. If the system were perfect, her books wouldn't have any readers...
Posted by Pericles, Tuesday, 11 August 2009 12:58:05 PM
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great article - though some of the proposed solutions may just scratch the surface . For example, more female representation isn't going to affect the fact that women have lower lifetime earnings through career breaks, a greater propensity to work part-time and lower average wages. Any scheme that links final retirement income to earnings is going to leave them relatively worse off.
Posted by Rhian, Tuesday, 11 August 2009 2:54:52 PM
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The whole concept of our retirement income being so dependent on the success and ethical integrity of the private sector is quite scary. We are continually provided with evidence that it isn't working.

Better we work toward a better government pension system that has some built in flexibility as well as the option to top up via private investments. What about a medicare type levy for the age pension based on income where there is a guaranteed "living-wage" pension for all and flexibility for a higher pension based on extra contributions.

If we are to stick with the private sector another possible fix-it idea might introduce income splitting for one income families where part of the tax saving could be used as a co-contribution for superannuation.
Posted by pelican, Tuesday, 11 August 2009 3:07:19 PM
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Glad to see that our Super system is a discussion topic.

For too long its been the Wild Wild West full of sleezebags selling doubtful products which make dubious claims about their returns. The only garanteed returns are the commissions paid to the financial planners and brokerage paid to the brokers.

At the recent AIA conference a few claims were made
1. since 1982 fixed interest has had better returns than equities
2. of the 500+ managed funds on sale in Australia only 5 have had consistent returns
3. 80% of investors would do better in listed index equities - Warren Buffett

I realise that nationalising the superannuation system would be
1. disasterous for the brokers and financial planners
2. tough for workers who can't work until age 67, who want/need to retire at age 55
3. tough for people passing intergenerational wealth through tax vehicles

The current system is overly complex
1. people still contribute to retail super funds
2. not every worker can join a industry or employer based super fund
3. still do not have a super clearing house to redirect employees contribution to their chosen super fund - an election promise
4. SMSFs in pension mode still have to calculate CGT but pay no tax
5. the annual administration and audit costs of a SMSF fund in pension mode would be at least $700 more probably $4000
6. there is no guarantee the the super savings will last to end of life especially if the trustees make unlucky decisions or foolishly follow advise from the financial advisors
Posted by billie, Tuesday, 11 August 2009 3:48:16 PM
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