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Superannuation Funds (superannuation + fund)

Distribution by Scientific Domains
Business, Economics, Finance and Accounting85%

Selected Abstracts

The Introduction of Choice of Superannuation Fund: Results to Date

AUSTRALIAN ACCOUNTING REVIEW, Issue 40 2006
ROSS CLARE
Commonwealth legislation providing for choice of superannuation fund has now been in operation since 1 July 2005. This paper explores the extent to which employees have exercised choice in the period immediately following the implementation of fund choice. The data available suggest that choice of fund has had only a modest impact. However, while community awareness of superannuation has increased and the level of member attachment to the main superannuation fund has increased, a downturn in investment returns, and subsequently in member sentiment, could have a significant impact on member preparedness to choose another fund [source]

AN INVESTIGATION OF HOME BIAS IN SUPERANNUATION INVESTMENT CHOICES

ECONOMIC PAPERS: A JOURNAL OF APPLIED ECONOMICS AND POLICY, Issue 1 2006
PAUL GERRANS
Australian superannuation funds have increased investment choices available for their members. Fund members can typically choose from a range of ready-made options or select their own asset allocations. Evidence suggests that individuals may display a home bias in these allocations by favouring domestic assets at the expense of international assets. Such a bias may produce a sub-optimal investment. This paper investigates the asset allocations of members of the Government Employees Superannuation Board (GESB), the superannuation fund for Western Australian public sector employees. Asset allocations appear to be in line with a normal allocation to international equity, especially at the time of their first choice. Subsequent choices however appear to be driven more by historical performance of the asset classes offered, rather than by a home bias. [source]

Asset allocation and age effects in retirement savings choices

ACCOUNTING & FINANCE, Issue 2 2010
Paul Gerrans
D91; G11; D14 Abstract We examine the asset allocation decisions of members of three large Australian retirement savings funds. Superannuation Guarantee legislation in 1992 made Australian employees compulsory investors by requiring employers to contribute a fixed proportion of earnings to a superannuation fund on behalf of employees. A majority of these employees can choose an investment strategy for these contributions. We examine how actual investment strategy and asset allocation choices of members change with age in view of the conventional wisdom that individuals allocate less to risky assets as they age and investments theory which provides conflicting advice on the issue. [source]

The Introduction of Choice of Superannuation Fund: Results to Date

AUSTRALIAN ACCOUNTING REVIEW, Issue 40 2006
ROSS CLARE
Commonwealth legislation providing for choice of superannuation fund has now been in operation since 1 July 2005. This paper explores the extent to which employees have exercised choice in the period immediately following the implementation of fund choice. The data available suggest that choice of fund has had only a modest impact. However, while community awareness of superannuation has increased and the level of member attachment to the main superannuation fund has increased, a downturn in investment returns, and subsequently in member sentiment, could have a significant impact on member preparedness to choose another fund [source]

AN INVESTIGATION OF HOME BIAS IN SUPERANNUATION INVESTMENT CHOICES

ECONOMIC PAPERS: A JOURNAL OF APPLIED ECONOMICS AND POLICY, Issue 1 2006
PAUL GERRANS
Australian superannuation funds have increased investment choices available for their members. Fund members can typically choose from a range of ready-made options or select their own asset allocations. Evidence suggests that individuals may display a home bias in these allocations by favouring domestic assets at the expense of international assets. Such a bias may produce a sub-optimal investment. This paper investigates the asset allocations of members of the Government Employees Superannuation Board (GESB), the superannuation fund for Western Australian public sector employees. Asset allocations appear to be in line with a normal allocation to international equity, especially at the time of their first choice. Subsequent choices however appear to be driven more by historical performance of the asset classes offered, rather than by a home bias. [source]

Persistence and the four-factor model in the Australian funds market: a note

ACCOUNTING & FINANCE, Issue 1 2010
Jacquelyn E. Humphrey
G11; G23 Abstract We investigate whether Australian fund managers are able to deliver persistent performance using Carhart's (1997) four-factor model. Short- and long-term persistence is examined and the sample is also divided into unit trusts and superannuation funds. We do not find evidence of persistence in any sample of funds. We find that winner (loser) funds tend to hold past winner (loser) stocks. Winner and loser unit trusts both appear to have positive exposure to small stocks. [source]

Attribution of investment performance: an analysis of Australian pooled superannuation funds*

ACCOUNTING & FINANCE, Issue 1-2 2001
David R. Gallagher
This paper evaluates the market timing and security selection capabilities of Australian pooled superannuation funds over the eight-year period from January 1991 to December 1998. Evaluation of both components of investment performance is surprisingly scarce in the Australian literature despite active investment managers engaging in both market timing and security selection. The paper also evaluates performance for the three largest asset classes within diversified superannuation funds and their contribution to overall portfolio return. The importance of an accurately specified market portfolio proxy in the measurement of investment performance is demonstrated. This paper employs performance benchmarks that account for the multi-sector investment decisions of active investment managers in a manner that is consistent with their unique investment strategy. Consistent with U.S. literature, the empirical results indicate that Australian pooled superannuation funds do not exhibit significantly positive security selection or market timing skill. [source]

Effect of Taxation on Equal Access Share Buybacks in Australia,

INTERNATIONAL REVIEW OF FINANCE, Issue 3-4 2005
CHRISTINE BROWN
ABSTRACT In Australia, equal access share buybacks can be structured so that a portion of the buyback price is designated as a fully franked dividend. The tax benefits derived from this structure imply that off-market buybacks are sometimes offered to shareholders at a discount to the current market price. This is in contrast to the United States, which operates under a classical taxation system, and where off-market buybacks are generally executed at a premium to the market price. The situation in Australia provides a unique opportunity to add to our understanding of taxation explanations for how and why companies buy back their shares. We find that the size of the discount of the offer price to the current share price is significantly related to the proportion of the buyback price designated a franked dividend. Analysis of the after-tax benefits to shareholders leads us to conclude that the structure of many equal access buybacks in Australia is advantageous to superannuation funds holding the stock. [source]

Don't Judge a Superannuation Default Investment Option by Its Name

AUSTRALIAN ACCOUNTING REVIEW, Issue 3 2010
Gerry Gallery
With the massive decline in savings arising from the Global Financial Crisis (GFC), it is timely to review superannuation fund investment and disclosure strategies in the lead-up to the crisis. Accordingly, this study examines differences among superannuation funds' default investment options in terms of naming and framing over three years from 2005 to 2007, as presented in product disclosure statements (PDSs). The findings indicate that default options are becoming more alike regardless of their name, and consequently, members may face increasing difficulties in distinguishing between balanced and growth-named default options when comparing them across superannuation funds. Comparability is also likely to be constrained by variations in the framing of default options presented in investment option menus in PDSs. These findings highlight the need for standardisation of default option definitions and disclosures to ensure descriptive accuracy, transparency and comparability. [source]

The Puzzle of Financial Reporting and Corporate Short-Termism: A Universal Ownership Perspective

AUSTRALIAN ACCOUNTING REVIEW, Issue 4 2009
Michael E. Drew
This study considers the controversy surrounding financial reporting and corporate short-termism as a puzzle. The question remains as to why corporate managers and investors persist in exhibiting behaviours that trade off long-term value creation for meeting short-term financial targets. Using inter-temporal choice theory, the myopia characterising decision-making is entirely rational, given the set of incentives faced. This study views the puzzle through the prism of universal owners (pension and superannuation funds), arguing that the investment policies or ,mandates' implemented by these financial behemoths is the source of the myopic behaviour. The paper explores a range of policies that universal owners may consider implementing to ensure that the payoffs to corporate managers and investors are optimised through the pursuit of long-termism. [source]

THE SYSTEMATIC RISK OF DEBT: AUSTRALIAN EVIDENCE,

AUSTRALIAN ECONOMIC PAPERS, Issue 1 2005
KEVIN DAVISArticle first published online: 21 FEB 200
This paper examines systematic risk (betas) of Australian government debt securities for the period 1979,2004 and makes three contributions to academic research and practical debate. First, the empirical work provides direct evidence on the systematic risk of government debt, and provides a benchmark for estimating the systematic risk of corporate debt which is relevant for cost of capital estimation and for optimal portfolio selection by asset managers such as superannuation funds. Second, analysis of reasons for non-zero (and time varying) betas for fixed income securities aids understanding of the primary sources of systematic risk. Third, the results cast light on the appropriate choice of maturity of risk free interest rate for use in the Capital Asset Pricing Model and have implications for the current applicability of historical estimates of the market risk premium. Debt betas are found to be, on average, significantly positive and (as expected) closely related, cross sectionally, to duration. They are, however, subject to significant time series variation, and over the past few years the pre-existing positive correlation between bond and stock returns appears to have vanished. [source]