Super

The meteoric rise of industry funds has earned them a rightful place at the top of the superannuation food chain. But their standing is not a given, and the failures are starting to mount.

Retirement’s approach requires a profound change in how investors approach markets and construct portfolios, including arranging their income needs around three distinct periods of retired life, the financial advice firm’s founders said.

Superannuation fees can add up to a huge long-term expenditure, costing Australians with modest super balances thousands of dollars a year. But costs may start to fall, with some funds and new players working to disrupt the structure.

A joint review conducted by ASIC and APRA was scathing of funds’ collective attempts to meet their new legal obligation to help fund members plan for retirement, and urged them to “address, with urgency, the gaps in their approach”.

While the move to tax superannuation balances above $3 million at a higher rate would affect only a handful of people at first, if the threshold is not indexed to inflation, future generations may be turned off from investing in their super, industry leaders say.

Australians across the board are less satisfied with their superannuation funds than they were a year ago, a new report from Roy Morgan showed, with share market volatility and industry consolidation acting as major drivers of the decline.

Speaking at the SMSF Association’s National Conference, the assistant treasurer called out “modern-day Edmund Hillarys” seeking to raid Australia’s “Mount Everest of superannuation” as he pressed the need for an objective for super that prioritises preservation.

Superannuation tax breaks will cost the government nearly $53 billion this year, nearly matching the cost of the entire age pension program, according to a new analysis that says major reform is needed. Meanwhile, the government has signalled a tightening of super legislation.

Australians’ penchant for property investment comes with the caveat that patience is a necessary virtue. This applies doubly so for fretful LRBA holders, writes Nicholas Way.

Superannuation funds are more commonly offering ‘lifecycle’ investment options that adjust with a saver’s age. But a recent paper by the superannuation regulator highlights that some of these funds aren’t sticking to their mandates.

Vanguard Australia recently launched a superannuation product aimed at undercutting competitors, with a low-cost default fund option that adjusts automatically as savers age.

There are a range of factors that will determine the fees a member will pay. The difference could have a dramatic effect on the final balance of a retiree’s nest egg.