Closing speech to the Association of Superannuation Funds of Australia (ASFA) conference in Melbourne, 15 November 2019.
Good morning everyone.
Thank you very much Minister Hume for joining the ASFA Conference.
Both you and Helen Rowell from APRA, earlier this morning, honour us by sharing your thoughts on the industry we love.
Minister, as our CEO Martin Fahy said earlier this week, in the spirit of transparency and so as to enable a well-informed debate, ASFA calls for Treasury to release its Model of Australian Retirement Incomes and Assets (MARIA), the software program that writes a long-term dynamic micro-simulation model of Australia’s retirement income system.
This model has been under development the last 5 years.
MARIA provides whole-of-population projections beyond the medium term of Age Pension expenditure and take-up; superannuation funds under management; and retirement income adequacy.
We should all have an opportunity to see, critique, and learn from the research underpinning this model. We need to reckon with the assumptions.
Yesterday, at one of our sessions and at other points at the conference, we discussed retirement policy. There are many issues to consider in turning a system that is the envy of most countries into something better.
Part of that, surely, is the taper system. Since 2017, when taper rates and thresholds were changed, the age pension tapering is too severe in hurting many retirees achieve a decent retirement. This needs review.
As an industry, we can never be satisfied with being approximately good.
Everything we do should be geared to doing the right thing.
That is the lesson I take from the Royal Commission and what I have heard over the last three days.
Sometimes you go to conferences wondering how much to skip and miss. Whether you really will be challenged and learn something new.
This conference, from setting the international challenges in perspective, in thinking about trust, about longevity and re-calibrating retirement options, in Martin’s stirring defence of our industry fundamentally good impact, made us think damn hard on day one.
I defy anyone to say they were not moved by the three presentations in the last session on Wednesday.
The conference themes were carefully chosen:
And throughout, there has been a subtext of focus on creativity.
ASFA welcomes greater transparency in the superannuation system but with this morning’s presentation by APRA on the methodology underpinning an inaugural MySuper heatmap, we urge caution.
ASFA is long on the record in supporting the removal of chronic underperformers from the system.
In our view, however, achieving sound investment performance and broader member outcomes is a long-term journey, measured in terms of decades.
Unintended consequences are therefore part of our focus.
APRA’s decision to rate individual fund investment performance over three and five-year periods need to be approached carefully. We will study the discussion paper released by APRA this morning. Let’s work to get the checks, measurement and results right.
Let’s be careful not to condemn individual funds, or damage the outcomes of their members, with knee-jerk reactions.
Australia’s superannuation system is truly a world class system and according to the OECD, achieves about the best investment returns and lowest costs charged to fund members in the world.
In thinking about this, I reflect on, say, the American system.
The first shows that 1 in 4 American workers have less than $1,000 saved for retirement.
When we take a closer look, the second slide in some ways is even more dramatic. 56% have saved less than $10,000 for their retirement.
And finally, a recent study of savings of New York residents suggests that many will work until they drop. Or try to. And when they can go no further, a remaining lifetime will be spent in poverty.
We are here to avoid those outcomes.
Finally, there are two very important roles to perform this morning.
The first is to thank this year’s conference committee group, our 23 volunteers who assist us over the 12 months preceding the event to develop the program – our Conference Program Committee. Meeting monthly all year to shape the content in a volunteer role is a huge commitment.
Thank you Martin Fahy, Glen McCrea, Nicolette Hughes, Andrew Boal and the whole ASFA team. Also the figures in purple, the ASFA staff and volunteers, including the many volunteers from Women in Super who helped us tremendously. We thank you.
The names of our many volunteers appear behind me.
And I thank you, delegates, friends for making ASFA what it is.
My next task is to launch the 2020 ASFA Conference.
(ASFA 2020 Launch video to play)
So… next year we will be returning to the Brisbane Convention Centre, another world class venue.
I hope you can all join us there from 25-27 November, for what I’m sure you agree is the premier superannuation event of the year.
Thank you everyone.