Andrea Slattery

The Mercer World Pension Index strong tick of approval for Australia’s superannuation system reflects well on the self-managed superannuation sector, says Andrea Slattery, CEO/Managing Director of the SMSF Professionals’ Association of Australia (SPAA).

The index, the globally recognised annual survey of 25 superannuation systems, rated Australia’s system as the second best after Denmark, with the prime reasons for Australia’s high rating being the increases in the Superannuation Guarantee and the age pension.

Slattery says: “The Mercer World Pension Index is widely recognised as being the last word on the differing superannuation systems around the globe, so for Australia’s system to earn second ranking is high praise indeed.

“Quite clearly, SMSFs, as the best performing, most efficient, largest and fastest growing part of the superannuation sector, can take their share of credit for Australia’s performance.

“In particular, the fact that each SMSF, on average, holds about $1 million in funds under administration, would have been a strong contributing factor for the Australian system being rated the highest in terms of adequacy. [The other two categories the Index uses to rate countries are sustainability and integrity.]

“Considering one in every 15 working Australians is an SMSF trustee or member, and this number is growing by about 3000 a month, and SMSFs represent $1 out of every $3 invested in superannuation, the health of our sector augurs well for Australia’s future ratings on the Mercer Index.

“The other factor to consider is how the Index identifies voluntary contributions as a vital component of a strong superannuation system. In Australia, it’s SMSFs contributing the bulk of these contributions,” she says.

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