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CSIRO-Monash Superannuation Research Cluster

Research Report

The CSIRO-Monash Superannuation Cluster Newsletter
Issue 2, 21 August 2014

Update from the Cluster Leader
This is the second edition of the Superannuation Research Cluster Research Report. We are delighted to include in this issue another tranche of research papers as detailed below, an update on the Stakeholder network, recent events and presentations.

In this issue we farewell Alan Dormer, of CSIRO who played such a critical role in developing the Cluster. Many thanks to Alan for his excellent work and vision. In Alan’s place we welcome Dr Sarah Dods, Research Director, Digital Economy at Digital Productivity & Services Flagship, CSIRO. Sarah previously led the CSIRO’s research in health services delivery within the Digital Productivity and Services Flagship where she led multidisciplinary research teams focused on supporting the future sustainability of Australia’s health system through evidence based digital services innovation to improve healthcare productivity, quality of care, and access to services for all Australians.

In this edition we also welcome ANZ Wealth to our stakeholder group which includes BT Financial Group, Challenger, CBus, Mercer and Vanguard, who together with key industry associations, ASFA, AIST, FSC, National Seniors, the ATO and the Treasury, will provide advice on the direction of the research program as it develops. For more details on the CSIRO-Monash Superannuation Cluster please click here.

Whilst only in its infancy I am pleased to announce that the CSIRO-Monash Superannuation Research Cluster has received a Commendation for the 2014 Dean’s Award for Research Impact in the Faculty of Business and Economics at Monash University.

 - Professor Deborah Ralston

Second Tranche of Working Papers Released
As the Research Cluster completes its first full year of operation we are delighted to release a further two Working Papers, which brings the total number of Working Papers released thus far to seven.

Gender Issues in European Pensions: some Australian Perspectives
Drawing on European research data and policy experience, Professor Noel Whiteside (University of Warwick) explores the gender gap in superannuation savings in PAYG pension systems, such as Australian superannuation, and policy responses to this issue in Europe, in particular the UK, Netherlands, Germany and Sweden. The findings demonstrate that labour market disadvantages (broken working lives: low paid work: strongly associated with large families) translate into lower pension savings for women, and that gender-derived pension gaps are larger than pay gaps and grow over time. Gender-derived pension gaps are largest in EU member states that, like Australia, attach future old age income most closely to personal savings or contributions. It is also noted that recent reforms promoting DC schemes will increase European gender-based pension gaps in the future.
Patterns of Voluntary Worker Retirement Savings: a Longitudinal Analysis                 
This paper provides an empirical analysis of voluntary retirement savings decisions within superannuation of a large database of Australian workers drawn from a wide range of employers. In contrast to the limited available evidence, the authors, Paul Gerrans (University of Western Australia) and Jimmy Feng (Monash University), utilise administrative data rather than reported decisions obtained from surveys. They examine participation in pre-tax (salary-sacrifice) and post-tax savings separately and also explore the inter-relationship between both choices.

Their analysis provides some contrasting evidence to that previously reported. In terms of the level of participation they find a decline in participation in pre-tax (salary sacrifice) contributions and in post-tax contributions between 2002/03 and 2011/12. Pre-tax contributions declined from 19% to 13% and post-tax from 15% to 5% over the period. The 2007/08 financial year is a clear marker with pre-tax contributions peaking before steadily declining after. The decline in post-tax contributions appears more clearly after the 2006/07 financial year. The association between these time markers and government policy changes regards superannuation contributions is apparent but are not the full explanation. The authors proceed to examine other factors underlying this declining trend.
Two Earlier Working Papers Accepted for Publication

We proudly congratulate the authors of two of the Working Papers mentioned in our first Newsletter which have recently been accepted for publication:
  • Drew, M, Stoltz, P, Walk, A and West, J 2014, ‘Retirement Adequacy Through Higher Contributions: Is This the Only Way?’, Journal of Retirement.
  • Viet Do, Robert Faff, Paul Lajbcygier, Madhu Veeraraghavan, Mikhail Tupitsyn, ‘Factors Affecting the Birth of and Fund Flows into CTAs’, Journal of Management.
Recent Events

Stakeholder Advisory Group Meeting 16th June
The recent Stakeholder Advisory Committee meeting held on the 16th June reviewed three research projects and recent deliverables:
  • Cluster Project 9: Post-retirement wealth and its effect on health and wellbeing – presented by Anthony Harris, Centre for Health Economics, Monash University
  • Cluster Project 11: Research into the Decummulation Phase of Superannuation - Presented by Zili Zhu and Thomas Sneddon
  • Cluster Project 3: Better Superannuation Outcomes: Information, Options, and Short-term and Long-term Member Behaviour - Presented by Jimmy Feng
Expressions of Interest have been called for distribution of some remaining research funds from the Cluster project Leaders.
The next meeting of the Stakeholder Advisory Group will be held on 30th September. As with the June meeting, interested parties from the sector – potential stakeholders – are invited to attend, and once again there will be presentations from selected Cluster researchers.
Workshop held at ATO offices Melbourne 5th August 2014
Further to this meeting a workshop was held at the ATO offices in Melbourne to further discuss projects 9 ‘Post retirement wealth and its effect on health and well-being’ and 11 ‘Research in the decummulation phase of superannuation’.

The latter project is the newest in our research program. A combined team of academic and CSIRO researchers are examining what individuals are currently doing in retirement with their funds including SMSF and super balances, spending patterns derived from ATO/DSS/DHS data. The researchers will determine the probability of ruin before death given fund balances at retirement and annual withdrawal patterns. Annual death probability is also modelled. The researchers will use this outcome to design an optimal investment strategy for meeting retirement objectives and understand retirees’ behaviour and preferences for new and innovative products, such as annuity products.
Quick Links 
Cluster Homepage
Research Projects

Research webcasts

Upcoming Events
Cluster Management Committee & Stakeholder Advisory Group Meeting 3-2014
30 Sep 2014
Annual Cluster International Workshop
2-3 Dec 2014
End-of-year Festive Cocktail 
4 Dec 2014

The Insto Report
22nd Annual Colloquium of Superannuation Researchers
The cluster was represented at the recent 22nd Annual Colloquium of Superannuation Researchers at the University of New South Wales. Co-hosted by CEPAR and the ASB's School of Risk and Actuarial Studies, the colloquium brought together academics, government and industry to discuss and debate the most important pension and superannuation issues.

Bernard Casey, from the University of Warwick, participated in the final plenary session where he gave a presentation on ‘Pension Fund Investment in Infrastructure: a Europe and Australia comparison’. One of our two full-time post-docs, Jimmy Feng (Monash University) presented on the paper ‘Patterns of Voluntary Contributions: A Longitudinal Analysis’ which he co-authored and is mentioned above as one of the two new Working Papers recently received.

ASFA Global Investment Forum in Sydney

Bernard Casey was certainly kept busy during his trip ‘down under’ as a week after the Colloquium he presented a paper at the ASFA Global Investment Forum, also held in Sydney.  

ATO Super Leadership Conference, Canberra, 7 August 2014
Deborah Ralston presented to the ATO in Canberra on the Cluster and the opportunities for further research collaboration. ATO is represented in the Stakeholder Group by Stuart Forsyth.
The Cluster Research Program

Contact Us

Prof Deborah Ralston
Cluster Leader
T: +61 3 9666 1010 | 

Dr Richard Dillon
Project Manager
T: +61 3 9666 1014 |
Dr Sarah Dods
Research Program Director
M: +61 477 300441
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About the CSIRO-Monash Superannuation Research Cluster
The CSIRO-Monash Superannuation Research Cluster is a collaboration between CSIRO, Monash University, Griffith University, the University of Western Australia, the University of Warwick, and stakeholders of the retirement system. The aim of the Cluster is to develop a research agenda that establishes an evidence base, to facilitate better decision making with respect to the superannuation and retirement systems in the interest of better outcomes for all. 

The Cluster Consortium 

In association with industry leading stakeholders and research partners
Superannuation Cluster industry leading stakeholders and research partners

The Cluster would also like to acknowledge the support of major industry bodies and government departments, including the Australian Institute of Superannuation Trustees (AIST), Association of Superannuation Funds of Australia (ASFA), Australian Prudential Regulation Authority (APRA), Australian Taxation Office (ATO), the Financial Services Council (FSC) and the Productive Ageing Centre, National Seniors Australia.