Tinkering with super must stop, says AMP

Peter Mason told shareholders at AMP's annual meeting yesterday that the superannuation system is "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, like mortgages and children."

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

"Superannuation is a long-term response to a long-term demographic and economic challenge.

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

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

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's banking arm benefited from a surge in deposits to $937 million, up from $56 million as investors continued to park investments in cash.

Deutsche Bank analyst Kieren Chidgey said the wealth management "backdrop remains tough".

"While near-term operating conditions remain challenging for wealth managers, we see considerable value upside," he said.

AMP shares rose 5? to $4.08.