Australia's superannuation system would improve if it looked to overseas public-private defined contribution models, according to Roger Urwin.
Mr. Urwin, global head of investment content at Towers Watson & Co., said the “moderately successful” systems in Sweden and Singapore had done much to address the problems that now are emerging in Australia's system.
“Australia's system has a lot of costs, which are a drag on performance,” Mr. Urwin said, in an interview with I&T News, Sydney.
“There's too much optimism in the alpha industry, and this is unsustainable. The alpha costs are a drag-anchor which carry a lot of cost with little benefit to members,” Mr. Urwin said.
“Too many funds are pursuing alpha with unrealistic expectations and too many products.”
The second problem locally was the orientation to see success through a prism of peer groups, rather than achievement of significant real returns for members, Mr. Urwin said.