The Great Superannuation Scam

I thought I’d step away from the democratic farce knows as the Federal Election 2010 to talk to you about something that has managed to pretty much not get a single word of media attention….that something is superannuation, in short your money for your retirement.

In the early 1990’s Australians were made to enlist in a scheme that would have the government and your employer contribute money on your behalf (yes it was actually your money, it was factored into wage growth forecasts and you took a pay cut and tax rise) into the Australian share market for you to cash in when you hit 65. All seemed fantastic, those that knew the share market knew that on average returns were around 6-7%, far more than you would get at a bank. Over the next 20 years this big pool of money grew and grew to a whopping 1.3 Trillion dollars.

What you were not being told is that over the last 13 years(since accurate records were kept) your money on average was returning 3.05% per annum, and when you factor in inflation (2.8%) you were effectively getting a return of 0.25% ……..or virtually nothing. Over the same period a term deposit account at your local bank would have got you around 4-5% and government bonds 5-7%.

Now the reason why your returns were so bad was not that you had chose bad investments, most were cruising along nicely at around 8-10%, the money you were lending these people to play with was being stung with massive fees. On average these fees were $85 a month to allow some goons to play on the stock exchange with your money and waste it.

Using 1.3 trillion dollars of workers retirement money as a play pool for financial planners and other parasites to give you a return of .25% is beyond wasteful, it is a rort. This money could be far better spent on long term energy projects (most wind farms return 10-12% pa long term) and various infrastructure development rather than lining the pockets of a few roaches.

It is beyond comprehension why this is not a major election issue, no doubt some lobby group is making sure it is not discussed in the media or by politicians. There is a more detailed article here if you wish to read more.

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