Great expectations

4 min read
4 min read

It seems that for every problem there’s someone who sees superannuation funds as either its cause, or as available funds to solve it.

Fortunately superannuation funds have not been blamed for the spread of the coronavirus, but I am sure it’s only a matter of time.

One of the many disappointing and distressing things about a crisis is that it tends to lead to stridency of views and reversion to type. We have seen plenty of both. In the current crisis, it would be much better to have civilised and constructive discussions about the best way forward. This has been the focus of the entire ASFA team over recent weeks and more generally, over the years.

Australia ranks around number three in the world in terms of the absolute size of its funded private pension system. It most likely ranks number one in terms of the pool of defined contribution pension assets with the United Kingdom and the USA still having very substantial defined benefit arrangements. One of the strengths of the Australian system is fund members’ attachment to having a specific account balance, rather than having a mere expectation of an eventual income stream. The downside is that the individual savings are seen as more open to be accessed.

Much has been made of the supposed A$3 trillion in superannuation assets and the potential availability of a small proportion of that amount for immediate income needs of fund members, rather than for their retirement needs.

However, the amount attributable and potentially available to Australian workers is much lower than that. For a start, the total amount in assets has come down as the result of the fall in the price of various equities. The total assets as at 31 March are more likely to be around $2.6 trillion. Also, substantial proportions of the aggregate assets are attributable to SMSFs, retirees, defined benefit funds, and balances of those not retired but not active in the labour force.

Most of the early release withdrawals are likely to come from MySuper accounts. As at June 2019 MySuper products had a total of 15.1 million accounts and $720 billion in assets. Both numbers are likely to have come down since then due to small inactive accounts being sent to the ATO (not all of which are to be reunited with active accounts of fund members) and lower equity prices impacting on aggregate (and individual) account balances.

It is unclear how many individuals will apply for early release on the new temporary grounds, but it could be up to 4 million individuals and involve up to $60 billion in assets. These are big numbers.

Whether to take early release or not is a difficult decision for the fund members involved. Even with JobSeeker and JobKeeper payments in play many Australians are doing it tough now and could be doing it even tougher in the months ahead. On the other hand, taking losses now on the value of superannuation balances and compromising eventual retirement super balances is a significant price to pay.

Volatility in investment markets makes it even harder for fund members to make informed decisions. Account balances currently showing when individuals log into their myGov account can be quite different to the 30 June 2019 balances.

These days a week brings about as much movement in prices as you used to get over the course of an entire year. At the time I am writing (1 April) it is down around 27 per cent from the market peak on 20 February 2020 but it is up around 15 per cent from the recent low on 23 March.

Moving forward, the primary challenge for Australia will be to get the pandemic under control and to provide the medical services that Australians require. Superannuation at both the individual and aggregate level will assist Australia in meeting other challenges ahead. It will provide income for those Australians most under pressure and a source of investment funds for businesses seeing out the crisis to recover once the health and medical challenges have been met.

Picture of By Ross Clare

By Ross Clare

director of research

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Derek Thompson

Via live link

Best Selling Author, Podcast Host of 'Plain English'

Sessions

Keynote 8 – Navigating the energy transition: opportunities, investor strategies and policy needs

Few speakers can match Derek Thompson‘s ability to synthesize mega-trends in society, labor, economics, technology, and politics. Put another way: Derek trawls the data sets and does the forecasting and deep reporting necessary to help us better understand how we live, how we vote, how we spend, and how we work.

In his paradigm-shifting #1 New York Times bestseller, Abundance (co-written with Ezra Klein), this award-winning journalist reveals how our policies and culture have pushed us into a world of scarcity (not enough housing, workers, or progress)—and offers a radical new path towards a world where housing is affordable, energy is plentiful, and innovation flourishes across industries.

He shares a compelling vision of a future where we have more than enough for everybody, and a practical, actionable roadmap for how to get there. It starts with taking more risks, building more expansively, and recognizing that we all have the power to create a world of abundance. “Everything’s utopian until it’s reality,” he says.

Carmen Beverley-Smith

Executive Director - Superannuation, Life & Private Health Insurance, APRA

Sessions

Keynote 8 – Navigating the energy transition: opportunities, investor strategies and policy needs

Carmen joined APRA in March 2023 and holds the role of Executive Director, Life and Private Health Insurance and Superannuation.  

She has had an esteemed career in financial services, spanning over 25 years. She has held diverse leadership roles at Westpac and Commonwealth Bank of Australia, including across risk, transformation and change, product and portfolio development, and sales and service. 

Prior to joining APRA, she held the role of General Manager, Risk Transformation Delivery Integration at Westpac. This involved leading the group-wide implementation of a suite of solutions to uplift risk management capability and develop data, analytics and reporting. 

Carmen leads with a values-driven approach and a particular interest in developing and mentoring talent. 

She holds a Bachelor of Commerce and Accounting, is a certified Chartered Accountant and a Graduate of the Australian Institute of Company Directors. 

Amy C. Edmondson

Novartis Professor of Leadership and Management, Harvard Business School

Sessions

Keynote 8 – Navigating the energy transition: opportunities, investor strategies and policy needs

Amy C. Edmondson is the Novartis Professor of Leadership and Management at the Harvard Business School, a chair established to support the study of human interactions that lead to the creation of successful enterprises that contribute to the betterment of society.

Edmondson has been recognized by the biannual Thinkers50 global ranking of management thinkers since 2011, and most recently was ranked #1 in 2021 and 2023; she also received that organization’s Breakthrough Idea Award in 2019, and Talent Award in 2017.  She studies teaming, psychological safety, and organisational learning, and her articles have been published in numerous academic and management outlets, including Administrative Science Quarterly, Academy of Management Journal, Harvard Business Review and California Management Review. Her 2019 book, The Fearless Organization: Creating Psychological Safety in the Workplace for Learning, Innovation and Growth (Wiley), has been translated into 15 languages. Her prior books – Teaming: How organizations learn, innovate and compete in the knowledge economy (Jossey-Bass, 2012), Teaming to Innovate (Jossey-Bass, 2013) and Extreme Teaming (Emerald, 2017) – explore teamwork in dynamic organisational environments. In Building the future: Big teaming for audacious innovation (Berrett-Koehler, 2016), she examines the challenges and opportunities of teaming across industries to build smart cities. 

Edmondson’s latest book, Right Kind of Wrong (Atria), builds on her prior work on psychological safety and teaming to provide a framework for thinking about, discussing, and practicing the science of failing well. First published in the US and the UK in September, 2023, the book is due to be translated into 24 additional languages, and was selected for the Financial Times and Schroders Best Business Book of the Year award.

Before her academic career, she was Director of Research at Pecos River Learning Centers, where she worked on transformational change in large companies. In the early 1980s, she worked as Chief Engineer for architect/inventor Buckminster Fuller, and her book A Fuller Explanation: The Synergetic Geometry of R. Buckminster Fuller (Birkauser Boston, 1987) clarifies Fuller’s mathematical contributions for a non-technical audience. Edmondson received her PhD in organisational behavior, AM in psychology, and AB in engineering and design from Harvard University.

 

Daniel Mulino MP

Assistant Treasurer and Minister for Financial Services

Sessions

Keynote 8 – Navigating the energy transition: opportunities, investor strategies and policy needs

Born in Brindisi, Italy, Daniel was a young child when he moved with his family to Australia. He grew up in Canberra and completed his first degrees – arts and law – at the ANU. He then completed a Master of Economics (University of Sydney) and a PhD in economics from Yale.

He lectured at Monash University, was an economic adviser in the Gillard government and was a Victorian MP from 2014 to 2018. As Parliamentary Secretary to the Treasurer of Victoria, Daniel helped deliver major infrastructure projects and developed innovative financing structures for community projects.

In 2018 he was preselected for the new federal seat of Fraser and became its first MP at the 2019 election, re-elected in 2022 and 2025. From 2022 to 2025, Daniel was chair of the House of Representatives’ Standing Economics Committee in which he chaired inquiries; economic dynamism, competition and business formation and insurers’ responses to 2022 major floods claims.

In 2025, he became the Assistant Treasurer and Minister for Financial Services.

In August 2022, Daniel published ‘Safety Net: The Future of Welfare in Australia’, which aims to explore the ways in which an insurance approach can improve the effectiveness of government service delivery.