'Tinkering' attacked

THE chairman of one of Australia's biggest financial planners has told the government to stop "tinkering" with the superannuation system.Peter Mason told shareholders at AMP's annual meeting yesterday that the system was "the envy of the world" and changes were "potentially muting its effectiveness".

By InvestSMART · 11 May 2012

By InvestSMART ·
11 May 2012

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THE chairman of one of Australia's biggest financial planners has told the government to stop "tinkering" with the superannuation system.

Peter Mason told shareholders at AMP's annual meeting yesterday that the system was "the envy of the world" and changes were "potentially muting its effectiveness".

"Constant changes to Australia's superannuation system, as we saw again in Tuesday's budget, undermine people's comfort in saving within this system," he said.

"It seriously constrains the ability of Australians to save more for their retirement at the very stage of their lives when they are freed of other financial commitments."

Mr Mason attacked the government's decision to delay higher concessional contribution caps for the over-50s with super balances under $500,000.

"Superannuation needs to be managed for the long term, not continually modified to meet short-term budgetary objectives."

In Tuesday's budget,Treasurer Wayne Swan detailed changes to superannuation laws, including an increase in taxes on contributions for people earning more than $300,000.

AMP reported a tough start to 2012, with net cash outflows rising to $292 million in the first quarter, up from $133 million. The company's Australian wealth management arm reported outflows of $138 million compared to a net cash inflow of $68 million.

AMP shares rose 5? to $4.08.

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Frequently Asked Questions about this Article…

What did AMP chairman Peter Mason say about tinkering with Australia's superannuation system?

AMP chairman Peter Mason told shareholders the government should stop 'tinkering' with superannuation, calling the system 'the envy of the world' and warning that constant changes 'undermine people’s comfort in saving' and can 'mute' the system's effectiveness.

Which budget changes to superannuation did Peter Mason criticise?

Mr Mason specifically attacked the government's decision to delay higher concessional contribution caps for over‑50s with super balances under $500,000. The article also notes the budget included an increase in taxes on contributions for people earning more than $300,000, announced by Treasurer Wayne Swan.

How might frequent superannuation changes affect everyday investors' retirement savings?

According to Mr Mason's comments in the article, frequent changes can undermine people's comfort with saving inside the super system and can constrain their ability to save more for retirement—especially at stages of life when they are freed of other financial commitments.

What does 'delay of higher concessional contribution caps for over‑50s' mean in this article?

The article says the government delayed planned higher concessional contribution caps that would have applied to people over 50 who have super balances under $500,000. The piece does not provide further technical details about the caps themselves.

How did AMP perform financially in the first quarter of 2012?

AMP reported a tough start to 2012: net cash outflows rose to $292 million in the first quarter, up from $133 million. AMP’s Australian wealth management arm recorded outflows of $138 million compared with a net cash inflow of $68 million in the prior period.

What do AMP's net cash outflows indicate for investors reading the article?

The reported net cash outflows indicate more client money left AMP than flowed in during the quarter highlighted. The article presents these figures as a sign of a difficult start to 2012 for the company but does not draw conclusions about long‑term impact.

Why did AMP shares rise despite the outflows?

The article reports AMP shares rose about 5% to $4.08 but does not explain the reason for the share price increase. The piece simply notes the share movement alongside the financial and commentary items.

What are the key takeaways for everyday investors from this article about AMP and superannuation changes?

Key takeaways in the article are: AMP’s chairman warned against continual tinkering with superannuation, the federal budget introduced measures including higher taxes on contributions for earners above $300,000 and a delay to higher caps for some over‑50s, and AMP reported significant net cash outflows in early 2012 even as its shares moved higher. The article highlights the interplay between policy changes and industry performance without offering investment advice.