Critics of the Australian superannuation system including with respect to its tax concessional status, have been guilty of using outdated and inaccurate data, according to Financial Services Council (FSC) chief executive, John Brogden.
In his address to the FSC conference in Cairns, Brogden singled out recent reports produced by the Grattan Institute and the Financial System Inquiry for their failings.
"In recent months, two reports — one from the think tank, the Grattan Institute and the other from the Financial System Inquiry — have weighed in with commentary, opinion and observation," he said. "Both have based much on research and data to support and prove their arguments. Sadly, neither have used vigorous or accurate data and in the area of international comparisons, both failed to recognise fundamental important, unique and individual features of the Australian superannuation system."
Brogden said the two most common mistakes had been comparing Australia's fully-funded defined contribution system to unfunded defined benefit schemes in Europe.
"These schemes have totally different asset allocation and return profiles. Australia also differs due to the large amount of assets in individual accounts within the self managed sector," he said. "It also ignores the fact that Australia's superannuation system is full service."
"The administration cost component for the average superannuation fund is 0.40 per cent. The services offered by Australian superannuation funds are vastly different to European DB schemes which don't offer any of these services. Essentially the data does not compare ‘like with like'," the FSC chief executive said.
Further, he claimed that old data was being widely used with most of the information used in the public debate being "pre-MySuper and draws on porous OECD data from 2009. And some of the statements on fees come from the Cooper Review in 2010, which led to the creation of MySuper".