ASIC’s ill-timed announcement

There will be bitter laughter, throughout Australia today, as people read that the authorities want the nation’s superannuation funds to provide their members with “snapshots” of their likely payouts, on retirement.

The Australian Securities and Investments Commission, which has advanced this proposal, could not have chosen a worse time to do so.

That’s because the nation’s superannuation funds have just suffered their biggest collective loss, ever.

The Superannuation research group SuperRatings, says the median super fund lost 6.4 per cent in the year to the end of June.

Losses of that size were, perhaps, inevitable, with both share prices and profits falling.

That, of course, is not the whole picture.

The latest loss had been preceded by four strong years of double digit returns.

And younger workers, in particular, will probably see their funds recover well, in future.

SuperRatings managing director, Jeff Bresnahan, says balanced funds have negative returns about once every six years.

But he conceded that the latest results will be a blow for people who plan to retire soon.

And he said the real problem, at present, is the extreme volatility of the market.

None of that, though, detracts from the merit of the snapshots ASIC is proposing.

It admits that there are problems with the idea, but says they can be solved.

And its proposal is very much in line with the Federal government’s own thinking.

Like to know more? Try www.asic.gov.au