September 2019

10Sep

Australian pension funds’ $168bln ‘wall of cash’ may lead overseas

Australian pension funds are sitting on a A$245 billion ($167.38 billion) 'wall of money' that will probably flow overseas because of a lack of domestic options, asset managers say. Thanks to Australian laws requiring employers to contribute at least 9% of a worker's salary to a pension, superannuation funds, as they are known locally, are the world's third-largest pool of pension assets, worth about $1.9 trillion. The Australian stock market is worth only $1 trillion. The nearly 2:1 ratio...

September 10, 2019
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06Sep

It’s Going to Get Harder for Australian Pension Funds to Make Money

Australia’s pension funds will be forced to push more money into less traditional assets -- such as apartment developments and even direct lending to companies -- after the strong recent performance of equities and fixed-income left valuations lofty in public markets. That’s the assessment of investors managing money directly for, or on behalf of, the country’s A$2.9 trillion ($2 trillion) pension pool, who gathered in Hobart this week. With four out of five retirement savers in funds that have a...

September 6, 2019
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August 2019

19Aug

Australia warns retirees over heavily investing in cryptocurrency self-managed pensions

Australia warns retirees over heavily investing in cryptocurrency self-managed pensions The Australian Tax Office (ATO) has issued 18,000 warning letters to investors of self-managed super funds (SMSFs) for concentrating the majority of their retirement savings in cryptocurrencies, according to local news outlet Micky. In its letter, the office said that retirees have a “duty to comply with legal requirements to adopt investment strategies avoiding risky investments.” Non-compliance could see them face a fine of up to AU$2,400 (US$2,852). As...

August 19, 2019
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19Aug

Baby boomers win ‘the demographic lottery’ as wealth inequality grows

Young Australians are being locked out of a "generational bargain" as the wealth gap between children and their parents soars, new figures show, as the government prepares the terms of reference for its landmark retirement income review. The review, recommended by the banking royal commission, is likely to dominate the government's agenda next year as Treasurer Josh Frydenberg draft the terms of reference for the all-encompassing inquiry into pensions, superannuation, aged care funding, housing and the equity of taxpayer...

August 19, 2019
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July 2019

24Jul

Two funds merge to form Australia’s second-largest pension fund

First State Super and VicSuper said on Tuesday that they have signed a binding deal to merge, creating Australia's second-largest pension fund as regulatory pressure drives consolidation. The new superannuation, or retirement, fund would have about A$120 billion (S$115 billion) in assets under management servicing over 1.1 million workers, the nonprofit funds said in a joint statement. AustralianSuper is the largest, managing about A$160 billion. A merger was a "proactive step for the two funds, and one that's very...

July 24, 2019
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15Jul

Australia. Pensioners gain $1000 boost as deeming rates cut

Pensioners will be up to $1000 a year better off from September when the Morrison government changes the income test for pensioners. The government will cut deeming rates, used to estimate how much some pensioners earn on their financial investments, for more than 630,000 pensioners and nearly 350,000 people receiving other income-tested Read more @AFR

July 15, 2019
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08Jul

Australia. Pension payments could increase with change to deeming rate

More than half a million Australians could have their pension payments increased with the government on the cusp of making a significant change. Labor claims if the government lowers the deeming rate by the same amount the Reserve Bank has lowered interest rates, some part-pensioners will be anywhere between $62 and $3875 a year better off.The government is unlikely to lower it by that much because it would almost wipe out its surplus but hundreds of thousands of pensioners...

July 8, 2019
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02Jul

Australia’s Top Pension Fund Explores Merger

Australia’s top-performing pension fund is considering merging with a smaller peer as consolidation grips the nation’s retirement industry. Melbourne-based Host-Plus Pty, which manages about A$43 billion ($30 billion) of retirement savings from hospitality and tourism workers, signed an agreement with Club Super to formally begin due diligence on a merger, the funds said in an emailed statement Tuesday. It’s anticipated the transaction will be approved, bringing greater benefits to members, the statement said. It’s the second merger in Australia’s A$2.8 trillion...

July 2, 2019
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June 2019

26Jun

Australia. The ‘average’ retiree is now self-funded

Australia has reached a major milestone, with most new retirees having enough savings to be self-funded rather than reliant on the age pension, new research shows. More than half of 66-year-olds were not accessing the age pension at December 2018 because their assets and income were too high, while 20 per cent were on a part pension. Only 25 per cent were drawing a full age pension. According to Jeremy Cooper, chairman of retirement income at Challenger who conducted...

June 26, 2019
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20Jun

Australia to Fix Flaws in World’s Fourth-Biggest Pension Pool

Australia’s third-largest pension fund is boosting its financial services division as a wave of baby boomers look to exit full-time work over the coming decades. The government will try again to stop the common practice of young workers automatically being charged for life insurance through their pension plans, Senator Jane Hume, the new assistant minister for superannuation, financial services and financial technology, told a Bloomberg conference Thursday. It will also work to ensure people are given better options for...

June 20, 2019
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