Aussies' super could swell by $16b by removing barriers: report

The news: Australians' retirement outcomes could improve by $16 billion by 2050, if the government allows super funds and fund managers to move customers to modern investment products, according to EY research commissioned by the Financial Services Council.

The numbers: A 40-year-old with a current balance of $80,000 could have an extra $198,676, from $484,005 to $683,689 by the time they retire in 2050, if superannuation trustees were allowed to move them to contemporary products without incurring tax penalties or regulatory barriers if they are currently invested in a legacy product, according to new Financial Services Council (FSC) research.

The context: A product modernisation framework would lift consumers' collective retirement income by $22 billion during their retirement. It would also strengthen the government’s medium and long-term fiscal position by almost $1 billion over the next 10 years, and $21 billion by 2050, according to the FSC research. “There is $132 billion invested in superannuation and investment options that could benefit from modernisation, impacting over 1.8 million customer accounts,” FSC CEO Blake Briggs said.