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Reasons for Decline of Superannuation Fund - Coursework Example

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Comparisons of market performances are presented in the "Reasons for the Decline of Superannuation Fund" paper to show actual differences and decline. The paper showed some issuers were not able to cope up with the losses…
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Reasons for Decline of Superannuation Fund
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Download file to see previous pages The growth in assets has been negative but the investments in other funds such as cash and fixed assets remain strong and gave benefits. However these benefits are outweighed by losses in other investments, such as shares, and the portfolio of investments registers negative growth. The investment market is volatile and subject to change, and when the markets go down, there is also a time for recovery. But can the superannuation pensioners afford to wait?

The Australian superannuation fund has been through significant developments in the past 10 years It was financially strong and well placed before the global crisis. However, the industry has been shaken, like others in the world, by the financial crisis. The industry earnings have declined, the solvency and liquidity of the fund are being tested, trust and confidence of pensioners over the system are deteriorating. International trade links have a contagion effect such that a crisis in one country causes a crisis in another country in a relative result.

Most analysts agree that one of the reasons for the crisis in a superannuation fund is international trade, and it is most logical to examine the reasons for its decline. Very few studies are found about reasons except economic downturn and a synchronized recession, perhaps because the answer appears to be obvious. The weakening of the capital market system in the U.S. led to the decline or collapse of the financial system and had particularly affected the superannuation fund through the contagions effect. The aggregate outcome in the economy and the pensioners is still unclear. Senator Nick Sherry (2009) said that Australia cannot be exempted from the effects of this crisis, and as an effect of the contraction of economies of the United States, Japan, and the European Union, he predicted the slow performance of the country’s export. Senator Sherry further said that the government reinstated its support to superannuation fund as he pronounced “that it will maintain stability, safety, and efficiency of the superannuation fund. ...Download file to see next pagesRead More
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