Pensioners feeling the squeeze
Another quarter of negative investment returns for superannuation and pension funds means pensioners are doing it particularly tough, with many needing to contemplate a return to the workforce, according to the latest data released by research house Chant West.
The Chant West data revealed that while returns had moved back into positive territory in March, this had not been sufficient to overcome a broadly negative quarter, with the median growth fund down 3.8 per cent and the median conservative growth fund down 1.2 per cent.
The Chant West analysis said the financial year to date picture was even gloomier, with growth funds down by 18.6 per cent and conservative growth funds down by 6.8 per cent.
Against this background the company said pension members could ill afford to suffer losses of such magnitude because, unlike working Australians, they did not have the opportunity to replenish their accounts with new contributions.
It noted that pensioners were also required to withdraw income payments based on a percentage of their account balance on the previous June 30, and while the Government had reduced the minimum percentage this year from 4 per cent to 2 per cent, most members would require more than that to meet their income needs.
“The combination of negative returns and withdrawals for pension payments has savaged many account balances — so much so that a return to paid employment has been the only solution for some members,” the Chant West analysis said.
AUTHOR
Mike Taylor
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