Simpler Super rules divide baby boomers

David Anderson

The new Simpler Superannuation rules have divided baby boomers, with a new study revealing the generation is split three ways on the debate.

According to a new study released by Mercer Wealth Solutions, Australians aged 50 plus are pleased, particularly indifferent or just plain puzzled about the new rules.

Mercer Wealth Solutions business leader David Anderson said a random sample of 300 working Australians aged 50 and over found one in three (33 per cent) were ‘happy’, 28 per cent ‘perplexed but hopeful’ and 39 per cent ‘disinterested and disheartened’ about Simpler Super.

“We think the findings present a test for super funds, financial advisers and the Federal Government in communicating the benefits of the rules before June 30, 2007,” Anderson said.

“Nearly three in four (70 per cent) respondents could not articulate any of the Simpler Super changes,” he added.

Anderson believed the research results suggested the Federal Government faces a challenge in its ongoing promotion of super as a competitive savings vehicle.

The study also found the over 50s were more united when it came to identifying who was responsible for communicating Simpler Super. Nearly all (89 per cent) said super funds were responsible, while 72 per cent thought the Government, 30 per cent believed financial advisers and 31 per cent said employers were responsible for communicating the new rules.

Other findings of the study included:

* 49 per cent were uncertain whether the rules would affect how they plan to prepare for retirement;

* 21 per cent were aware the maximum undeducted contribution until June 30 is $1 million;

* after seeing some changes, 20 per cent claimed they would be ‘likely’ to make extra contributions between now and June 30;

* of those unlikely to contribute extra, a lack of funds and knowledge were the main reasons given;

* 32 per cent said the rules made super easier to understand, 32 per cent said they made no difference to understanding, 7 per cent said they made super more difficult to understand and 30 per cent did not know;

* 27 per cent said the rules made retirement decisions easier, 39 per cent said they made no difference to making financial decisions about retirement, 7 per cent said they made decisions harder and 27 per cent were not sure;

* 11 per cent said the changes were very beneficial, 30 per cent somewhat beneficial, 17 per cent not at all beneficial and 42 per cent did not know enough to comment; and

* nearly half (49 per cent) of the respondents were aware of allocated pensions, 43 per cent were not and 8 per cent didn’t know or were unsure.

The study was conducted between March 14 and 19, 2007.