Peter Chun, Chief Executive of UniSuper, highlighted the global admiration for Australia’s retirement system, advocating for the eventual increase in contribution rates to 12%. Chun emphasized that the compulsory nature of superannuation is crucial in ensuring Australians can maintain their quality of life post-retirement without undermining the long-term goals of the system due to short-term economic challenges.
Kate Farrar, Chief Executive of Brighter Super, echoed Chun's sentiments on the significance of preservation but noted that there are circumstances where these parameters should be reconsidered. She pointed out that financial hardship among vulnerable members raises questions about relaxation in preservation rules. Farrar also acknowledged that societal shifts demand a recalibration of contribution rates to address the unique financial hurdles faced by younger generations today.
Deanne Stewart, Aware Super Chief Executive, reiterated that the principles of preservation are fundamental. She stressed that as super funds expand, considerations of liquidity, valuation, and global best practices become essential to maintain the system’s integrity.
The discussions at the summit underline a growing recognition of changing financial landscapes and the challenges these present. Preservation of superannuation is emphasized as key to safeguarding retirement incomes. However, the acknowledgment of younger generations' economic struggles highlights the need for a dialogue on balancing long-term preservation with current financial realities.
The conversations bring to light differing views on adaptation and whether the current rules remain appropriate amid evolving societal factors. The overarching theme is the necessity of maintaining a balance between enduring preservation principles and emerging member needs.
The pathway forward may involve reassessing preservation settings, particularly in light of financial hardship cases and a changing economic environment for younger Australians. As super funds scale up, there is a concurrent need to enhance technology and ensure efficient service delivery, as pointed out by Insignia Financial's Scott Hartley. Improvement in technology can support better member services, which is becoming a focus amidst restructuring efforts within the industry.
Moving forward, the superannuation sector must address its investment strategies, particularly the allocation towards illiquid assets as advised by the International Monetary Fund. This foresight aims to prevent potential stability risks and guarantee the system remains robust for future retirees.
