With less than a third of the superhero who should be his age, 54 – year – old Craig Johnson does not think he will ever retire – and he blames his super fund.
Despite being an employee for nearly 40 years, Craig still has less than $ 100,000 in his overdraft.
According to the Super Funds Association of Australia (ASFA), a 54-year-old like him should save $ 330,000 to call it a comfortable retirement.
Craig was self-employed during times when he was not involved in his super contribution, but he also believes he paid more.
“When I compared the comparison between my wife’s account and mys and what I thought I would contribute during that time, I stumbled,” he said.
“I thought something might have gone wrong. I thought it might have been on account at the time.
“You’d like to think you’ve got a reliable nest egg to trust again. It’s a very empty feeling when you don’t have it.”
‘Performance’ on radar
In last month’s budget, the federal government announced new game rules that forced inactive funds to boost their game, but critics fear it will have a negative impact on them, and some will leave badly.
As a result of the federal government’s financial efficiency and high fees people are retiring without the nest eggs they need to keep.
“We know that if you get stuck in an efficient fund, your pension savings will cost tens of thousands of dollars,” Assistant Minister of State for Assistance Jane Hume said.
Includes new activities announced last month New online comparison tool And a system to reduce fake accounts.
But the biggest shake-up is a new way of measuring “performance” and punishing funds found to not serve their members.
“Now, every financial manager can have a bad year,” Ms Hume said.
“The Productivity Authority believes that the eight-year horizon is an appropriate criterion for testing whether a fund is functioning and fulfilling its promises.”
Super funds will be judged on their performance against definitions for different types of investments.
However, Scott Donald, a legal educator at the University of New South Wales, is concerned that the reforms could affect some Super Fund members.
“One of the things I think the government needs to consider is what kind of dynamics are going to happen,” Mr Donald said.
“One of the real risks we face here is the very difficult question of determining for oneself a fund with less performance over a period of time.
“At the time it was not clear what kind of decision the chief executive of that fund was going to make.”
The recession raises cash questions
If a fund is declared effective, it should tell existing members and stop accepting new members.
Mr Donald said it could present his own problems.
He said people who receive a letter that their finances are not working may be nervous and withdraw their money, and some may not even open the envelope first.
“The sacked members we are trying to protect, they will be left in the fund,” he said.
He said members could get out of pocket if they had their super fund assets on fire or had to leave to raise the costs of a fund.
The government tried to tackle an important issue, but said its proposal was a “sledgehammer”.
“The risk is that the design of test two and the response to what happens when someone is identified as an effective financier – there are not enough techniques in understanding what can happen.”