Super is great AND we should strive for it to be better

I did a quick search on Google News for “superannuation” this evening and here are a selection of the articles that popped up:

• “New laws to make superannuation safer“, The Australian
• “Political battle heats up with superannuation reform bills in Parliament“, The New Daily
• “APRA implores an end to infighting“, Investment Magazine
• “ISA accuses Government of ideological vendetta“, Money Management

It would be easy for the average person to read these headlines and be concerned about the contemporary compulsory retirement savings system – which we call “super” – which was born in Australia in the early 1990s.

But hang on just a minute. If you dug around in the Google News cellar a little longer, you might find some other recent articles about a thing called the “Melbourne Mercer Global Pension Index” or “MMGPI” for short (granted this name does not exactly roll off the tongue, but there you are). Here are a couple of these articles:

• “Aussie pension scorecard slips but still medals“, nestegg.com.au
• “Australian pensions still highly rated but face headwinds“, Investment Magazine

So what is the MMGPI? Well, I’m glad you asked. It’s an annual ranking of the super systems of about 30 countries around the world; big countries, small countries, countries we do a lot of trading with, and countries we care about. And if you read much of the local commentary about the Australian super system, you’d never guess what the MMGPI has to say about the Australian super system. It says that out of the 30 countries assessed in 2017, based on the “adequacy”, “sustainability”, and “integrity” of the system, the Australian super system is the 3rd best in the world.

That’s right. 3rd best! In! The! World!

Below is the country ranking from page 6 of the 2017 MMGPI report. Ranking above Australia are Denmark and the Netherlands – good on them! And below Australia are a host of other countries including Singapore, New Zealand, Canada, Germany, the UK, the US, Malaysia, China, and Japan. Its noteworthy that many of these countries aren’t just a little behind Australia, they are a lot behind.

(Source: Melbourne Mercer Global Pension Index 2017 report)

What’s the point of this for you then? I think there are a few points at least.

Firstly, it’s dead easy to be critical about anything and I feel we Australians are particularly good at doing critical. But every now we should step back, and be open to appreciating what we have, albeit imperfect. We should be delighted that our political and industrial relations leaders, 25+ years ago, had the imagination, foresight, and political will to put in place the foundations of the super system we have today.

AND

Secondly, we should be hungry to do more and be better. Obviously there two countries doing better than Australia in aggregate, and numerous others that are doing better on individual measures; so we shouldn’t “rest on our laurels”. Third place is a bronze medal, but the only thing preventing us from “going for gold” is ourselves. We need to be open to learning from the experiences of others nations, to not be satisfied with the status quo, and “import” the best ideas into our super system where that makes sense.

AND

Thirdly, between the modest Federal Government Age Pension, the Australian superannuation system, and savings & investments outside of super – many Australian’s ought to be more confident about their financial future than they actually are. If you’re already confident about this, then fantastic! But if you aren’t, what are you going to do about it? Here’s a hint, take an interest, start planning today, and do all you can do to achieve the retirement lifestyle you aspire to!

PS: BigFuture has a whole education section to help you get started on this journey. Why not take a look?

PPS: If you’re keen to read more about the MMGPI, then follow this link to the 2017 report.

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All information provided by BigFuture Pty Ltd is of a general nature only and does not constitute personal financial advice. Neither BigFuture Pty Ltd nor any person associated with it intends to provide personal advice. BigFuture Pty Ltd and its directors and officers are making no recommendation about any investment or financial product.