Register For Our Mailing List

Register to receive our free weekly newsletter including editorials.

Home / 138

Where is superannuation research heading?

What is discussed when 80 delegates from the superannuation industry, as well as Government, regulatory and academic bodies, come together for a day? How about superannuation and the economy, ambiguity of system and participant purpose, governance, wealth and health, big data and member behaviour, asset pricing and returns, changing work patterns and retirement outcomes, and retirement product design.

These were the focus of research presented this month at the 2015 CSIRO and Monash University Superannuation Research Cluster conference.

Founded in 2013, the Cluster is a collaboration between the CSIRO, numerous universities and industry participants in the retirement system. Its broad aim is to develop a research agenda establishing an evidence base for improved decision-making in the interests of better retirement outcomes for all. A select few topics are highlighted below.

Health costs in retirement

The health costs of older Australians are a core Government and private savings expense, yet the variability of costs between individuals is significant. Some will experience good health and be able to allocate a greater share of private retirement income to discretionary leisure. Others will experience a costly health event, the sequencing of which can be significant in impacting future retirement incomes.

Medical technology enhancements will decrease costs for some health episodes, while longevity will create new and expensive costs related to aged care and support, and dementia management. A key challenge is how to integrate policy settings with product design, and plan for a share of health costs from public and private savings. The overlaying complication for individuals is how to insure retirement income for events that can’t be predicted and where associated costs aren’t certain.

Much retirement income longevity modeling is based on the standard consumer price index (CPI) definition and inflation. But medical inflation is a different beast with greater adverse impact on older people. Is it worth considering an age-based CPI in modeling the longevity of retirement incomes, to enable greater consideration of the aged care and health costs facing retirees?

Changing work patterns

The world of work is changing with increased casualisation of the workforce and more workers experiencing frequent role changes and breaks from full-time employment. A linear pattern of consistent and steadily increasing superannuation contributions will not be the future norm. The impact of maternity-related career breaks on lower retirement outcomes for women is increasingly well known, and a similar pattern will play out for a greater number of workers.

What policy settings and product design might be considered to enable people with career breaks to maximise contributions when they can and with the same tax benefits of the traditional linear employment model?

Retirement income expenditure and big data

A common theme across papers was the industry’s lack of knowledge about how retirees spend their private retirement savings and income. Some research has suggested on average 90% of retirees’ wealth across their home, superannuation savings, and other non-super savings and investments remain unspent upon their death.

Research presented suggested some retirees frame minimum drawdown levels as a form of default target expenditure, and struggle with the shift from accumulation and saving to consumption. Concerns about income longevity and a desire to transfer wealth to the next generation are key motivators.

Government has signaled intent through recommending comprehensive income products for retirement (CIPRs) to revisit income distribution in retirement. Superannuation’s potential as a tax effective wealth transfer vehicle is also being reviewed.

Improvements in management information system capability present the opportunity for wealth financial providers and researchers to leverage big data in better understanding retiree spend patterns, and help frame policy settings and product development.

Industry and research cluster collaboration

Increased investment in academic research into the superannuation sector demonstrates greater Government demand for evidence-based policy development and settings. Industry providers can also benefit from the research findings. The need for greater collaboration between industry participants in developing policy, products, and services has never been greater.

The conference program and synopsis of papers presented is available here.

Information about the research cluster, projects, and research papers is available at: www.superresearchcluster.com/

 

Iain Middlemiss was Executive Manager Strategy at Colonial First State and Head of Strategy at Superpartners. This article is for general educational purposes only. Cuffelinks attended the conference at the invitation of the Australian Centre for Financial Studies.

 

RELATED ARTICLES

Why 10/30/60 is no longer the rule

The case for the $3 million super tax

Are lifetime income streams the answer or just the easy way out?

banner

Most viewed in recent weeks

Australian house prices close in on world record

Sydney is set to become the world’s most expensive city for housing over the next 12 months, a new report shows. Our other major cities aren’t far behind unless there are major changes to improve housing affordability.

The case for the $3 million super tax

The Government's proposed tax has copped a lot of flack though I think it's a reasonable approach to improve the long-term sustainability of superannuation and the retirement income system. Here’s why.

7 examples of how the new super tax will be calculated

You've no doubt heard about Division 296. These case studies show what people at various levels above the $3 million threshold might need to pay the ATO, with examples ranging from under $500 to more than $35,000.

The revolt against Baby Boomer wealth

The $3m super tax could be put down to the Government needing money and the wealthy being easy targets. It’s deeper than that though and this looks at the factors behind the policy and why more taxes on the wealthy are coming.

Meg on SMSFs: Withdrawing assets ahead of the $3m super tax

The super tax has caused an almighty scuffle, but for SMSFs impacted by the proposed tax, a big question remains: what should they do now? Here are ideas for those wanting to withdraw money from their SMSF.

The super tax and the defined benefits scandal

Australia's superannuation inequities date back to poor decisions made by Parliament two decades ago. If super for the wealthy needs resetting, so too does the defined benefits schemes for our public servants.

Latest Updates

Planning

Will young Australians be better off than their parents?

For much of Australia’s history, each new generation has been better off than the last: better jobs and incomes as well as improved living standards. A new report assesses whether this time may be different.

Superannuation

The rubbery numbers behind super tax concessions

In selling the super tax, Labor has repeated Treasury claims of there being $50 billion in super tax concessions annually, mostly flowing to high-income earners. This figure is vastly overstated.

Investment strategies

A steady road to getting rich

The latest lists of Australia’s wealthiest individuals show that while overall wealth has continued to rise, gains by individuals haven't been uniform. Many might have been better off adopting a simpler investment strategy.

Economy

Would a corporate tax cut boost productivity in Australia?

As inflation eases, the Albanese government is switching its focus to lifting Australia’s sluggish productivity. Can corporate tax cuts reboot growth - or are we chasing a theory that doesn’t quite work here?

Are V-shaped market recoveries becoming more frequent?

April’s sharp rebound may feel familiar, but are V-shaped recoveries really more common in the post-COVID world? A look at market history suggests otherwise and hints that a common bias might be skewing perceptions.

Investment strategies

Asset allocation in a world of riskier developed markets

Old distinctions between developed and emerging market bonds no longer hold true. At a time where true diversification matters more than ever, this has big ramifications for the way that portfolios should be constructed.

Investment strategies

Top 5 investment reads

As the July school holiday break nears, here are some investment classics to put onto your reading list. The books offer lessons in investment strategy, financial disasters, and mergers and acquisitions.

Sponsors

Alliances

© 2025 Morningstar, Inc. All rights reserved.

Disclaimer
The data, research and opinions provided here are for information purposes; are not an offer to buy or sell a security; and are not warranted to be correct, complete or accurate. Morningstar, its affiliates, and third-party content providers are not responsible for any investment decisions, damages or losses resulting from, or related to, the data and analyses or their use. To the extent any content is general advice, it has been prepared for clients of Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892), without reference to your financial objectives, situation or needs. For more information refer to our Financial Services Guide. You should consider the advice in light of these matters and if applicable, the relevant Product Disclosure Statement before making any decision to invest. Past performance does not necessarily indicate a financial product’s future performance. To obtain advice tailored to your situation, contact a professional financial adviser. Articles are current as at date of publication.
This website contains information and opinions provided by third parties. Inclusion of this information does not necessarily represent Morningstar’s positions, strategies or opinions and should not be considered an endorsement by Morningstar.