Question

Superannuation funds in Australia experienced significant growth between 1990 and 2013. What regulatory action caused this pattern? Do you expect a similar pattern between 2014 and 2021?

Answer 1

Regulatory actions that esulted in the significant growth:

• Encouraging actions and regulations by the government to encourage people to accumulate money under superannuation funds.
• Superannuation in Australia was made partly compulsory
• It was well supported by tax benefits.
• Minimum standards for contributions by employees was put in place.
• Standards were put in place for the management of superannuation funds.
• It was made compulsory for employers to make superannuation contributions for their employees over and above the employees' wages and salaries.
• Salary salary sacrifice arrangements were put in place under which people were encouraged to make additional / incremental voluntary contributions.
• Agreement was put in place between the government and the trade unions

A similar growth pattern in indeed expected between 2014 and 2021, because:

• Both employees and empoyers are more concious about the superannuation fund
• Awaareness about the importance of superannuation is now more.
• Employees are more educated, the fund management had improved over a period of time.
• Returns in the superannuation fund had been significant