Favourability towards Australia’s superannuation system has increased in the past year according to the second FSC-ING DIRECT Superannuation Sentiment Index.
The index gauges how confident and engaged Australians are with their superannuation.
The FSC-ING DIRECT report has found the improved sentiment has been driven by superannuation fund performance along with pride, trust and confidence in the superannuation system. This has been offset by reduced confidence in the value of fees paid, support for the current system and fund transparency.
‘Stability and certainty’ of the superannuation system showed the biggest positive shift (+11) while the ‘judgment of value of fees’ showed the largest negative shift (-5).
John Brogden, CEO of the Financial Services Council said: “A second year of double digit returns for superannuation has clearly had a positive impact on sentiment.”
“This year’s results show that bipartisan support to leave the policy and tax settings of superannuation alone has resulted in the largest improvement in trust and stability in the superannuation system.”
Vaughn Richtor, CEO of ING DIRECT said: “While satisfaction with returns has improved, perception of fees has declined.
“The industry needs to do a better job at explaining fees so that people can make the right decisions on choosing a fund,” Mr Richtor said.
“This includes ensuring fees and charges are fair and provide value for money, education and transparency around investments, and enable Australians to view their superannuation balance and activity on a regular basis.”
Mr Brogden added: “MySuper will provide fund members with detailed information around investments and fees.”
“The industry can play an important role in helping members become more engaged with their superannuation, which will be the single biggest investment that many Australians make in their lifetime.”
The FSC-ING DIRECT report also found that people’s confidence in their super providing them with a comfortable retirement has increased. In 2013, 62% said their superannuation would be inadequate compared with 52% in 2014.
Perceptions of the amount required for an adequate retirement varied widely − 50% (46%) believe $500,000 or less will be enough while 34% (38%) say $1 million or more is the right amount.
Mr Richtor added: “As a compulsory system, it is critical that superannuation maintains strong support to ensure superannuation achieves its full potential and that Australians have adequate savings in retirement.”
