Australian government fund would put a stop to the gravy train

Australian government fund would put a stop to the gravy train, by Adam Creighton.

Almost a third of Australians would rather be given $200 in cash than receive $2000 in superannuation, according to a 2014 Westpac survey….

Whatever the impediments to 16th-century reform in Florence, they were nothing compared with what Financial Services Minister Kelly O’Dwyer faces if she tries to improve the efficiency and competitiveness of superannuation. … O’Dwyer will have the two most powerful vested interests in the country — finance and unions — arrayed against her.

Compulsory super, in place for more than a generation, has created the world’s longest gravy train, delivering more than $30 billion a year in fees to a vast army of fund managers, administrators, financial advisers, custodians, bankers, directors, unions, employer associations, lawyers, accountants and pen pushers. The flow of cash easily will exceed the national defence budget within a few years.

The Productivity Commission’s landmark report into super, released this week, laid bare the extent of the inefficiencies: one in three super accounts is unintentional, draining almost $3bn a year in fees from savings; poor-performing funds are setting up millions of workers on ordinary earn­ings to retire with $600,000 less in savings than they should receive. …

A typical family with a combined $300,000 is paying, probably unwittingly, about $3000 a year in fees, more than for electricity and gas combined.

Soft corruption on a huge scale, enforced by the power of government coercion. Good one Paul Keating — who, admittedly, mainly acted on the advice of the treasury bureaucrats.