We’re not ready for choice, Norwich claims

Most Australians are not ready for choice of superannuation fund despite the Government’s most recent attempt to put the policy firmly back on the agenda, a survey conducted by theNorwich Uniongroup has found.

The survey, compiled for Norwich by Sweeney Research, revealed that 67 per cent of employed people under the age of 40 have limited knowledge about superannuation.

Even more dramatically, the survey found only half of those in their primary retirement savings accumulation years - 40 to 49 years of age - were aware of their superannuation needs.

“How can we expect people to understand the real benefits of choice of superannuation fund, if our school system, the industry and the Government have not yet sufficiently educated people about the importance of providing for their own retirement?” Norwich Union managing director Allan Griffiths says.

“Put simply, it is obvious that Australians are just not equipped to adopt choice of fund.”

The release of Norwich’s survey findings follows the launch last week by the Government of a new set of policy proposals on the portability of superannuation.

The minister for revenue and assistant treasurer Senator Helen Coonan says the proposals, which are aimed at making it easier for individuals to transfer their superannuation savings across different accounts, are part of the Government’s ongoing bid to have choice of fund introduced by July 1, 2004.

But Griffith says Norwich’s research proves most individuals do not have the basic understanding of superannuation and investments needed to make informed decisions in a choice of fund environment.

“Experience shows that investors traditionally manage their own investments based on which fund manager performed best last year, with little regard for a strategy appropriate to their age, circumstances and needs,” he says.

Griffith says individuals with little or no knowledge about superannuation would need to contact a financial adviser in order to deal with the increasingly complex nature of retirement savings, even if a choice of fund environment does not materialise.

“There is an already bewildering choice in the superannuation market and most people are just not trained to understand it. The only way to deal with it is to visit an independent financial adviser who can create a long term financial plan that ensures [individuals] make the right financial decisions,” he says.