New Zealand's fund managers appear united in wanting the Government to provide firm direction on the issue superannuation savings, according to the latest quarterly investment outlook survey carried out by Russell Investments.
Following recent warnings from the Financial Services Council about looming demographic challenges and their impact on superannuation, New Zealand's leading fund managers were asked for their views on the actions needed to face those challenges.
"While many options were put forward there is a strong body of opinion among our leading fund managers that superannuation saving should become compulsory and that the retirement age should be raised," said Daniel Mussett, Russell's Head of Consulting. "Fifty percent of fund managers support those two options, while around a quarter of those surveyed suggest means testing of future government superannuation entitlements."
Mr Mussett said there was also a strong emphasis on greater and more open discussion of the current issues around government superannuation and the future of Kiwisaver.
"Fund managers want to see expectations set early so that workers have time to prepare for any changes to existing schemes and entitlements."
The regular survey of the mood of fund managers also found a drop in optimism towards the New Zealand economy. 50% of fund managers expect growth to be stronger in the next 12 months on the back of earthquake-related economic uplift and the improving domestic property market. However, that's down from the 89% of managers who expected stronger growth in the previous quarterly survey. Around 38% of those in the current survey expect no change in growth over the next 12 months.
Optimism remains over the likely performance of international equities but that optimism is muted for New Zealand equities when compared with sentiment in the March quarter. In March, 67% of fund managers were bullish about New Zealand equities but that has dropped to just 38% in the current quarter, with 25% of managers expressing a bearish outlook for the New Zealand market.
"I'd put that change in sentiment down to the renewed concerns about events in Europe and the implications this has for global economic growth", said Mr Mussett.
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