A few super millionaires skewing reality
The very few people with super balances reaching into multiple millions of dollars are creating adverse perceptions and distracting from reality, according to participants in a roundtable conducted by Money Management's sister publication, Super Review.
Towers Watson chief executive, Andrew Boal, pointed to recent research which suggested that the number of people with large super account balances was only around 450, but acknowledged that this resulted in both negative headlines and negative perceptions.
Deloitte partner, Russell Mason, said that the superannuation system, as currently constructed, did not generate the amounts that many people believe.
"That is for two reasons — one, the limits on contributions and the fact that $30,000 a year to an ultra-high-net-worth person is small and superannuation is only a tiny part of their wealth and the other thing is that even those who are high income earners generally don't engage in super until they get in their 50s," he said.
Mason said that prior to entering their 50s people tended to focus in on mortgages and other investments.
Association of Superannuation Funds of Australia (ASFA) chief policy officer, Glen McCrea agreed with Boal that the actual number of people with super accounts over $10 million was relatively small, with the actual number around 475, but acknowledged that this represented enough to generate concern about the system.
Boal said that while people talked about the need for people to have $1 million for a comfortable retirement, that needed to be looked at in context with marital status, home ownership and other factors being taken into account.
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