The great Australian superannuation fraud (Australian version of old-age security)

[Hannah Bell]

Returns on Australian compulsory superannuation savings, a scheme sold to workers as a substitute for the old-age pension, have barely surpassed the rate of inflation over the last 14 years, according to official figures compiled by the government-funded Australian Broadcasting Corporation (ABC). These figures are proof that the superannuation system, which Labor and the trade unions proclaim as their “proudest achievement”, is one of the greatest swindles in Australian history.

According to the ABC’s compilation of figures released annually by the Australian Prudential Regulation Authority, the average annual return on superannuation investments between 1997 and 2009 was just 3 percent, as compared to an inflation rate across the same period of 2.8 percent. Taken over past decade, superannuation funds have returned less than the inflation rate—meaning that workers would have been better off simply putting their money in the bank.

The figures are partly explained by market volatility, especially the huge losses during the initial stages of the global financial crisis, and by poor investment decisions on the part of superannuation funds managers. Just as importantly though, the risible returns are all that is left over once investment advisors and fund managers, including trade union bureaucrats, take their hefty slice. A staggering $A17 billion in fees— or $48 million per day— is siphoned off each year from workers’ savings. As the ABC pointed out, this sum alone would be sufficient to fund the entire Australian old age pension system...

Compulsory superannuation, introduced by the Keating Labor government in 1992, involved an obligatory employer contribution of 3 percent of each worker’s wage to superannuation funds, which would then be invested in Australian securities, especially the stock market. The chief aim was to transfer a large pool of capital into Australian investment banks, which would then be in a position to punch above their weight on the global stage. In other words, there is a direct link between Labor’s super system, the refusal of successive governments to increase the poverty-level old-age pension and the increasing financialisation of the Australian economy.

http://www.wsws.org/articles/2010/aug2010/supe-a16.shtml

[Prometheus Bound]

1. Fuck those fees. That just pisses me off.

Same where I live. I was perfectly content saving my money in the bank with no risk and no fees. Then the government started a forced retirement program whereby you MUST put your money in a fund from which managers take a couple of per cent each year. So if I choose a no-risk investment to keep my capital, the fees end up being more than the interest. So I lose money.

Bankers own all governments. That's all I can see.

Fuck the investment bankers and the rest of their lot.

[dixiegrrrrl]

2. This is what the catfood commission wants to create.

Mandatory retirement savings accounts that will generate a huge pool of money which can be gambled away by for profit financial interests.
Then again, the government has not proven to be trustworthy with our dollars either.