Super funds

[theasxgorilla]

http://www.news.com.au/business/money/story/0,28323,25687497-14327,00.html

You know, I'm not shocked. I've been saying it for years.


Cheers

Sir O

What exactly have you been saying for years?

Isn't this a function of the high equities exposure of most superfunds? I mean the article even suggests that. And it's only measuring returns/losses for 2008... I mean, c'mon, anyone who invests and is worth their salt knows you need to review a performance record, where 10 years is typically better than 5.

IF the long term performance shows inferior returns, I still wouldn't throw the baby out with the bath water. Superannuation needs to evolve. Become more sophisticated. Why do I never hear the word hedging in discussions involving superannuation?

What do we expect when everyone has such a large proportion of their investible capital exposed to long-only equities funds and we have a financial crisis and share market collapse???

I (we) know someone who gave away in '08 what he made in '07. And he made a LOT in '07! Measuring '08 alone doesn't tell us much. The general rule of thumb applies, the bigger your gains, the bigger your drawdowns. BTW, the person I'm referring to above made a proverbial killing from '02-'06.

ASX.G

 

[gooner]

IMHO should be no distinction between principal place of residence and other assets when it comes to the pension. There are plenty of providers who will provide equity access for seniors to get at the value in the family home. Having millionaires cry poor because it is tied up in the family home is ridiculous - they should just borrow against it.

The pension is designed to be the last resort for people who do not have enough assets/income, not a trough to feed from, so that the family home can be given to the kids

In a world with an ageing population and limited resources, providing pensions to rich people is frankly obscene

 

[Julia]

Well considering other assets count towards whether they receive the pension, why shouldn't the family home?

I could have $300K worth of assets and own an average house worth $500K and be one year off retirement. Knowing my assets will make me ineligible for the pension, I could sell these assets and buy a $800K home so I could receive the pension.

Hopefully you wouldn't be so silly as to do this.

Australian Government theory is that social security is a safety net, not a right, like the age pension is in NZ, where everybody of age pension receives it regardless of how wealthy they are.

True. But bear in mind that (unless this has changed since I lived there) there's no tax free threshold in NZ and tax rates are (were) higher than here. The age pension is fully taxable.

The 80% figure comes from the section of the report that specifically talks about Australia, here is what it says:

"The high risk of old-age poverty in Australia is mainly due to the relatively low level of the age pension:
equivalent schemes in other OECD countries are worth 25% more (compared with national average
earnings) than the age pension in Australia. New Zealand’s basic pension, for example, is worth 80% more
relative to average earnings than the age pension."

Thanks for providing that detail, Timmy. I still don't get it either.
When currency difference is taken into account, there's only a few dollars difference between the A and NZ pension amounts.

The basic single pension in NZ is $363.50 per week gross (http://www.winz.govt.nz/manuals-and...s_rates/new_zealand_superannuation_tables.htm)

The basic single pension in Aus. is $284.90 (http://www.fahcsia.gov.au/guides_acts/ssg/ssguide-5/ssguide-5.1/ssguide-5.1.8/ssguide-5.1.8.10.html)


On a different note, I noticed a link in the article from The Australian to a February article, saying:
ALMOST 400,000 millionaires are receiving the age pension and 51,200 people in the nation's top income bracket also are getting the welfare payment.

I think this constitutes those people who get as little as $1 per fortnight of pension. It's a sliding scale payment, (asset and income tested), don't know the actual figures.

It's probably a bit like the way they assess the unemployment figures, i.e. if you work one hour a week or something you are deemed to be employed.

So if you receive 10 cents of age pension, you will be included in the stats of those "receiving the age pension". So maybe not as bad as you think, Timmy.



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