Focus on super ‘frustrating’: panel

19 February 2021

The superannuation guarantee (SG) debate does not provide for a good discussion on retirement, according to a panel discussing the Retirement Income Review. 

Speaking at the SMSF Association National Conference, Retirement Income Review panel member, Dr Deborah Ralston, said the SG rate conversation tended to be polarised and this did not make for a good discussion. 

“We can’t get a good discussion that we need to have about different groups of people and how well the system is suiting them. It’s been a great strength of the report to not have recommendations and just to have findings and to encourage that level of debate,” she said. 

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“Hopefully we can get past talking about SG and talk about the much broader range of issues within the retirement system itself. 

“…It is frustrating is there so much focus on superannuation that it kind of takes the oxygen out of the debate to an extent because there are many different parts of that system and understanding how they all work together and how to make the most of that combined cohesive package is the really important part. Super has been a bit overdone.” 

Ralston said the industry needed to think about retirement income rather than retirement nesting. 

Challenger chair, retirement income, Jeremy Cooper, said he was blind to the 9.5% SG and did not get excited about the issue.  

“For most people 9.5% seems to be enough, particularly on a household basis. And if it isn’t it’s because people are using their savings efficiency. This has got two limbs – the enormous amount of capital have in the family home, the report talked about the importance of the family home and pointed out that a lot of people sit on that capital instead of consuming it steadily via reverse mortgages,” he said, 

“Secondly, it was the nest egg problem – people have been told for 40 years to build up and savings is good, and when they get to retirement they adopt the same behaviour and if they do get advice that is often reinforced as the value proposition is to build up wealth. A lot of drivers of the system is about building wealth. 

“This is where the review strongly pointed to the Retirement Income Covenant as a potential solution and again reaffirmed by the government that the plan is to impose new  duties and obligations on trustees across the system to help retirees consume their capital more safely.” 

Smart Capital Group director and chief executive, Bernie Ripoll, agreed and said that it should  be retirement the industry should be discussing and not superannuation and the SG vehicle.  

Vanguard Australian principal, head of corporate affairs, Robin Bowerman, said financial advisers would be critical to overcoming behavioural biases that were inbuilt over generations. 

“Advisers have to be able to tell them you shouldn’t just live on interest on income. You should drawdown on principal savings and that’s a fundamental behavioural switch people need to make,” he said. 

“Advisers at the coalface are going to be one of the major groups to help people get across that, particularly in a low return environment.” 




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