OPINION: Super funds that continue to inflate the value of unlisted assets risk losing members determined to protect their retirement savings.
Could Australia’s $3.4 trillion superannuation industry ever see a surge in withdrawals as panicked members rush to protect their retirement nest-eggs by switching funds?
But as regulators hone in on the new risk of bank deposit flight, they also need to worry that super funds – particularly those with huge portfolios of unlisted assets, such as commercial property and infrastructure – could be at risk of a liquidity crunch if members were to switch funds en masse.To date, super funds have downplayed this risk.
In that situation, fund members watching what’s happening will feel understandably aggrieved as they watch other people taking advantage of the situation to get out at higher prices by switching funds, and will be inclined to follow suit.is usually calculated by projecting future revenue, and then applying a discount rate, which reflects the long-term bond yield.
All the same, there is a correlation between the valuations of commercial real estate and infrastructure.
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