In 2004, the Federal Government is planning to introduce choice of superannuation fund for the majority of Australian workers.
In 2004, the Federal Government is planning to introduce choice of superannuation fund for the majority of Australian workers.
Yet, a survey by Sweeney Research commissioned by Norwich Union Australia has highlighted that 67 per cent of the employed public under the age of 40 have limited knowledge about superannuation. While only 50 per cent of people in their prime accumulation years (40 to 49 years olds) are aware of their superannuation needs.1
“How can we expect people to understand the real benefits of choice of superannuation fund, if our school system, the industry and the Government have not yet sufficiently educated people about the importance of providing for their own retirement? Put simply, it is obvious that Australians are just not equipped to adopt choice of fund,” commented Allan Griffiths, Managing Director of Norwich Union Life.
The new legislation gives employees the choice to determine which superannuation fund the compulsory super contributions from their employer are paid into. It also gives people the opportunity to move existing super balances to their fund of choice.
“Experience shows that investors traditionally manage their own investments based on which fund manager performed best last year, with little regard for a strategy appropriate to their age, circumstances and needs,” said Allan.
The draft legislation requires employers to provide employees with an unlimited choice of superannuation funds in which to place their superannuation guarantee contribution.
“There is an already bewildering choice in the superannuation market and most people are just not trained to understand it. The only way to deal with it is to visit an independent financial adviser who can create a long term financial plan that ensures you make the right financial decisions,” said Allan.
Research conducted by ANOP Research Services, supports the view that people are still under educated about their retirement and superannuation needs. A recent study conducted by them highlighted that only one person in four gives retirement savings a high priority.2
Most people say they are simply concentrating on paying off their mortgage. This suggests they are ignoring the fact that nine out of every hundred dollars they earn are being directed into long term savings.
“I agree with the view that there should be a fourth ‘R’ at school – RETIREMENT. Clearly too few of us understand the whole issue.”
“Employed Australians have to start seriously considering the lifestyle they want to have in their retirement and take steps to make it happen. The earlier these people contact an independent financial adviser the better – it’s time to take control of your financial well being. Being prepared for superannuation choice is simply one way of building a better financial future,” Allan said.
Allan Griffiths is available for interview on 0419 307 319.
1Sweeney Research Survey, Attitudes of the Employed Public, Melbourne, August 2002
2ANOP Research Services Survey, National Survey of 30-69 Population, August 2001
For further information, please contact:
Simon Morgan
Group General Manager Public Affairs
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