Informed Superannuation Choice: Constraints and Policy Resolutions
AbstractThe latest controversy to emerge in Australia's ever-changing superannuation system is the failure of the proposed "member choice of fund" legislation. While superannuation choice continues to be widely supported, the debate lacks coherent policy direction. This paper addresses the policy hiatus by developing a framework to systematically examine endogenous and exogenous constraints affecting the achievement of informed choice, members' choice preferences and associated policy resolutions. Applying this framework, we argue that a genuine choice of fund model should cater for active and passive choice, where passive choice applies to fund members who, for various reasons, are unwilling or unable to make active choices. Appropriate education programs and standardised disclosure are identified as critical prerequisites to enable informed choice by those members who want to actively participate in the management of their superannuation savings. To protect the interests of passive choice members, we recommend the option of a government-regulated universal default fund (UDF).
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Bibliographic InfoArticle provided by Queensland University of Technology (QUT), School of Economics and Finance in its journal Economic Analysis and Policy (EAP).
Volume (Year): 32 (2002)
Issue (Month): 1 (March)
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Web page: http://www.journals.elsevier.com/economic-analysis-and-policy/
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Find related papers by JEL classification:
- H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
- J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions
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