Hello fellow super enthusiasts!

Saturday 20 August, 2011 marked a special day in my heart…it was of course, the 20^th birthday of our dear friend, the Superannuation Guarantee (SG). It was a dark and stormy night – oh sorry, wrong story… It was a budget speech given on 20 August, 1991 by the then Treasurer John Kerin where he first announced the concept of SG. A year later, it would become law.

When first introduced, the SG started at a measly 3% before gradually increasing to the 9% we know and love today. However, getting it to 9% wasn’t easy and at the time, there was a lot of commentary suggesting that lifting the SG would result in substantial costs to employers with the follow on effects of job losses, a rising unemployment rate and even businesses going broke. Let’s not forget that we were in the middle of “a recession that Australia had to have”.

Interestingly, what the 9% SG in fact did was assist the economy in enduring the global financial crisis, (and we didn’t fair too badly in comparison to our international neighbours) improve dignity in retirement and positively affect economic growth. And cop a load of this, when the rate of SG was increased from 3% to 9%, unemployment rates actually dropped along with real unit labour costs…just a bit of food for thought.

So in my humble opinion and it is very humble, I think it’s time. Time we took the next step down the retirement reform journey and headed for the sign that reads ‘dignity in retirement’ for everyone because that’s what this is all about. Treasury has estimated that lifting SG to 12% means people aged 30 today, on average weekly earnings, will end up with an extra $108,000 in super when they retire. Not exactly small change is it! 

With that, I’ve got some questions for the three people reading this:

• What do we need to do as an industry to get SG to 12%?
• Is 12% enough, should we just aim higher and be done with it?
• Lifting the retirement age overseas saw people out with their signs and megaphones, so why aren’t people rioting in the streets to support the SG increase?

With that, it’s cup of tea time.

Yours in Super

Hans

Hello fellow super enthusiasts!

In my last post, I mentioned that the Medicare Clearing House team is looking at new opportunities to help promote the facility and its benefits to hundreds of thousands of small businesses across the country.

Well, the Government has now announced it is undertaking a massive mail out campaign to over 680,000 small businesses to do just that! You can read more about it here.

So what do you think? Do you have any experiences with the Clearing House that you’d like to share? Let me know.

Yours in Super

Hans

Greeting Fellow Super Enthusiasts!

This week we have a guest blog from the multi-talented Melissa Birks, Superpartners’ Customer Experience Implementation Manager. Melissa has been in the industry almost as long as I have … well, not quite considering she is much younger….but she is certainly as knowledgeable in all things Super. I’m sure you will enjoy her wise ranting this week while I put my feet up.

Yours in Super

Hans

You vs James Packer

Picture this – you buy a new home and need to take out a mortgage of $400,000.  On the same day James Packer buys another waterfront mansion in Sydney for $4.5 million dollars.

Both of you head off to the bank to negotiate your mortgage rate (well, to be honest the bank would probably come to James).  Who do you reckon will get the better rate on their mortgage, you or James?

Or imagine you’re buying a new car and it’s you vs. James again, you’re getting a nice, reliable Toyota Corolla and he’s buying a top of the range BMW.  Will you or James get a bigger percentage discount?

I think we can agree that unless you’re a master negotiator James is going to get a bigger discount and lower rate than you because the banks and car dealers see the potential for lots more big deals in the future.

The same outcome occurs when you’re investing your money.  You’ll get a better rate of return with lower fees when you’re negotiating to invest $10 million than $10,000.

The bottom line is that for most Australians the ‘mates rates’ deal is out of reach…or is it?

One of the main reasons Industry Super Funds were formed was to allow Australian workers, earning a working wage, to have access to the same deals that the richest and most powerful Australian does.   The average balance for a member in an Industry Super Fund is $20,000 – not much negotiating power there.   But, when it’s combined with thousands of other accounts in a collective investment; the playing field changes.  The top four funds that Superpartners administers have a collective $76 billion to invest.  Compare this to James Packer’s net worth of $5 billion and you can see the Industry Super Funds are in a very strong position to negotiate the best deals for their members.

This means that working Australians get access to the lowest fees, the best rates and the most favourable terms for their second biggest financial asset; their super.  A better deal means a better outcome for their retirement and that’s got to be a good thing for everyone.

Your thoughts?

Melissa Birks

Hello fellow super enthusiasts!

If you’ve been reading each and every one of my posts (surely someone is?), you’d have heard me bragging about the Medicare Clearing House. Specifically, the fact the Clearing House has now been operating for one year and has been producing fairly solid results in terms of uptake and output.  However, a little birdy tells me that the Clearing House team is now looking at new opportunities to raise awareness of the Clearing House services and promote the facility to hundreds of thousands of small businesses across the country.

The ATO, on behalf of the Department of Human Services, is looking at mailing a letter and flyer to small businesses that are likely to fit the Clearing House eligibility criteria. Overall, the pack would be sent to over 683,000 small businesses, via a staggered campaign commencing mid-August and ending mid-November 2011.

This is great news as the data coming out of the Medicare Clearing House is top notch which makes life as a humble administrator much easier. Therefore, the more data from Medicare, the merrier…..hmm, bit early in the year for Christmas references, but that’s ok!

If you’re still reading, why not drop me a comment about your experiences with the Medicare Clearing House…good, bad, ugly, let me know.

Yours in Super

Hans

Hello fellow super enthusiasts!

Some of you already know that I often can be found at airport lounges either on the way or just coming back from yet another super conference.  Well, do I have some good news for you!  There’s a super conference all about super admin coming up!  How timely this is given that we are about to expect Minister Shorten to announce details on Stronger Super, including the all-important SuperStream!

So what is this super admin conference I hear you say…?

Each year, the AIST Superannuation Administration Symposium (or SAS) brings together the best in local and international experts to address current issues, raise new ideas and challenge the way you think about the future of superannuation administration, and this year is no different!

So, don’t put it off any further (I know you want to attend) and bring a colleague with you! They will thank you for years to come! 

Have a look through the program for full details. My picks are:

Lessons from the US – Call Centre Case Study

Stronger Super – what you need to know

Technology…to infinity and beyond

A propos… yes, I will be there (in fact I am chairing a session) and I look forward to meeting you and sharing some super ideas on the future of super admin.

Yours in Super

 Hans

Hello fellow super enthusiasts!

I’m back on deck now as the family and I have returned from sunning ourselves on the NSW coast…you missed me right?

Can I just say that whilst having a break is nice, it makes you realise just how quickly the bank account erodes when there is no money going into it…only out of it. As usual, that got me thinking about super and what this means, so I was pleasantly surprised to find that the ASFA Retirement Standard was updated while I was away.

The new figures released show that retirees will now need an extra 600 bucks p.a. to live comfortably, compared to the last quarter. Ouch. That means a comfy lifestyle will cost a couple about $54,500per year and a single, around $39,800. Living a more frugal existence is obviously cheaper, but it still equates to about $31,200 and $21,500 for a couple and single respectively.

I wonder how much you need if you still have your four kids hanging around? I have a feeling the amounts would be a lot higher…double maybe? More like quadruple! 

Either way, the numbers show that we need to be diligent with our super and for those of us who aren’t engaged like I am (it is perfectly normal to have every statement you’ve ever received colour coded in a binder), we need to make sure the system if efficient.

It’s like trading in the fuel guzzling, but good looking supercar to a reliable, yet smart looking and responsible hybrid.    

On that note, I’m off to check the millions of emails that have piled up while I was away….most of which is fan mail I’m sure.  

Yours in Super,

Hans

Hello fellow super enthusiasts!

I was just reviewing some exceptionally insightful comments from a young super enthusiast and it reminded me of another contributor to the world of super still in its infancy; the Medicare Small Business Superannuation Clearing House!

Minister for Human Services and Social Inclusion, Tanya Plibersek, announced last Wednesday that it was Medicare’s birthday. Ok, that’s not really what the Minister announced, but I love any excuse for a bit of cake and a cup of tea! What the Minister really announced was that the Medicare-run free Clearing House has churned through $50 million in payments during its first year in operation.

About 92,000 employee super payments have been processed through Medicare and about 4,600 small businesses have now registered to use the Medicare service….not bad. Personally, I’m supportive of anything that helps improve the efficiency of the super industry and makes it easier for stakeholders to comply and participate in the system for the ultimate betterment of members.  

The Minister goes on to say that “….98% of [the Medicare] clearing house users are satisfied or extremely satisfied with the service.  Some 99% said they would recommend the service to other small businesses, and 96% agreed or strongly agreed it saves them time.” 

So, here is the big question for this week…..and here is where we need your brilliant ideas! 

What can we do to promote this great service so that more small employers – and yes there are about 750,000 small employers who employ less than 20 employees – can enjoy the same great experience as these early adopters.  Maybe we should ask Matt Preston from MasterChef to do a quick Clearing House demo in between making a simple “Roasted Pheasant Breast with a Quick Game Sauce, Beetroot and Tomato Puree, Potato and Truffle Gratin and Beans” and whipping up an easy “Flourless Chocolate Cake with Morello Sour Cherries, Grand Marnier Crème Fraiche & Pomegranate Molasses”.  

I understand it is easier to process super contributions through the Medicare Clearing House than making this cake!  Anyway, maybe you have a better idea.  Please share! Happy New Year!

Yours in Super,

 Hans

Hello fellow super enthusiasts!

The heading for this Blog was my attempt at being cool but according to my kids, if you use the word cool, you are miles from actually being cool. Oh well, onwards and upwards! Hopefully, you didn’t look at the heading on this entry and think I had misspelled the word ‘public’. Hopefully, you know that PBLCI is the Pensioner and Beneficiary Living Cost Index.

So, what is this index? The PBLCI measures the effect that changes in prices of goods and services have on the out-of-pocket living expenses of those on the Age Pension and other households where the main source of income is a Government benefit. The PBLCI is released by the Australian Bureau of Statistics every three months and appears in Age Matters, which I mentioned in my last blog.

Anyway, having a squiz at the March 2011 quarter shows that the index has risen, for all-groups, by 1.9%.  The gist of the matter is that health increased a fair bit (+6.7%), transportation jumped up (+3.6%) and food prices nipped up (+3.3%). Probably because of banana prices….I went to a café the other day and without thinking, I ordered a banana smoothie which resulted in needing to dust off the credit card to pay for the thing!

When we talk about adequacy, when we talk about super, when we talk about product design, it all seems to be centred on accumulation and pre-retirement. We need to make sure that super is a whole of life product and that post-retirement products step up to the plate. Why? Because when you compare the PBLCI series since it began in 2007, it’s risen a substantial 15.2% compared to CPI which rose 12.2% over the same period. So cost of living doesn’t get any easier to bear as you get older…hmm, maybe we should do something about adequacy now? I know! How about increasing SG to 12%?

What are your thoughts on post retirement products, adequacy, costs of living – let me know!

Yours in Super,

 Hans

Hello fellow super enthusiasts!

You may recall an earlier blog entry in which I was banging on about a new acronym….what do you mean I am always banging on about acronym?! I have hardly ever mentioned SEA, ASP, APRA, ATO, SG and of course I rarely say TFN!

Ok, enough of the silly stuff, I am in fact talking about the Low Income Earners Government Contribution (LIEGC). Currently, about 3.5 million Aussies get no tax benefit from contributing to super, due to the 15% contributions tax equalling or exceeding their marginal tax rate. The LIEGC provides these members with a superannuation payment of up to $500 per annum to remove the disincentive of contributions tax.

It’s a cracking idea and will go a long way in helping increase the super balances of those earning under $37,000 per annum. Anyway, the discussion paper was released for consultation yesterday and it details how the measure will actually work, be administered, the eligibility criteria etc.

Once you’ve had a read of it, let me know how you think this measure should work and I’ll have a word to my friends in Canberra.

For example, if we imagine this being in place within the Stronger Super regime, how should the LIEGC interact with MySuper products? For example, should a MySuper product take precedence over other products when it comes to the LIEGC being credited?

I don’t have the answers….that’s why I’m asking you!

Yours in Super,

Hans

Hello fellow super enthusiasts!

No matter what you call it, how many times it gives you a virus, what it costs you each month or how fast your kids eat the allotted data supply in your contract, the Internet is an amazing beast. I think it’s probably fair to say that it’s fundamentally changed the way we operate, communicate and live.

Being the knowledge-thirsty nerd (yet surprisingly snappy dancer!) that I am, I was pondering who invented the Internet and with that, I decided to do what everyone does now when they want to know something…I Googled it!

According to Wikipedia, the origins of the Internet date back to the swinging sixties. But it wasn’t until the nineties when the Internet was commercialised that things really kicked off and the technology was rolled out en mass to the general population. Now, I know what you’re thinking…. no, this isn’t a technology blog, this is a super blog…. so where am I going with this you might wonder?

Well, I was reading the Australian Bureau of Statistics update, Age Matters June 2011 (you can find it here: http://www.abs.gov.au/ausstats/abs@.nsf/mf/4914.0.55.001 ) when I came across some interesting facts surrounding older people and use of computers and the Internet. Have a look:

• In 2003, 28% of people aged 60 and over living in households had used a computer in the past 12 months. In 2009, this jumped to 47%.
• In 2003, 21% of people aged 60 and over had used the Internet in the previous 12 months. In 2009, this increased to 41%…that’s almost double!

Normally, the mantra in our industry is that “older” people don’t use the Internet or aren’t comfortable with computers, which is why we have a proliferation of hard copy communication and transactions.

Well, it seems that’s not necessarily the case! The “oldies” are getting techy!

With more and more funds moving towards online transactions, member portals and electronic fund transfers, we will soon be able to see the light at the end of the paper tunnel. Did I hear someone say “SuperStream?”

I myself am quite comfy with computers and computer devices….now, how do you print this blog thing?

Yours in Super,

 Hans