At a recent conference hosted by the National and Torres Strait Island Council (NATSIC), a gloomy conversation point emerged. The discussion was meant to be about Aboriginal superannuation. But Anthony McCarthy, marketing development manager for Catholic Super, says a surprise was in store.
'Most of the questions were about funeral benefits and (provisions) for the beneficiaries,' he says. 'Almost none of the questions were actually about retirement or how to access money at an earlier stage during the life span. It was a little bit shocking. They didn't seem to see it as something they could access through their lifetime.'
Superannuation is not generally available before the age of 55. For most of the population of Australia this is scarcely a problem, as they are likely to live well into their 80s. The question tends to be more about whether there be enough of a nest egg to last that long.
But the average life span of Aboriginal Australians is much lower — according to the Australian Bureau of Statistics, just 67.2 years. Many will not live long enough to derive financial advantage from their super.
Graeme Mundine, executive officer for the Aboriginal Catholic Ministry in the Sydney Archdiocese , says the age difference between the Aboriginal and non-Aboriginal populations ranges between nine and 15 years 'depending on where you are living'. He says the average is about 12 years difference. 'It used to be 20.'
One reason the misalignment of life expectancy has not received great attention is that Aboriginal super is not well developed.
According to a recent report by the Association of Super Funds of Australia, 'Equity and Superannuation — the Real Issues', Indigenous Australians have lower coverage and lower balances on average than the general population. Indigenous Australians' coverage is about 70 per cent for men and 60 per cent for women, compared to 85 per cent for men and 80 per cent for women in the population more generally.
Average balances are also lower than for the equivalent Australian population as a whole.
Current superannuation arrangements and administrative requirements, according to the report, often do not match the circumstances and needs of indigenous Australians, particularly those in remote areas who may have difficulty communicating with their superannuation fund, claiming benefits or identifying lost accounts.
Craig Arthur, national administrator of the National Aboriginal and Torres Strait Islander Catholic Council (NATSICC) says the shift in governmental policy to raise the preservation and retirement age for superannuation access, which reflects the increasing life expectancy of the Australian population, is not representative of the Indigenous community.
'When that is combined with the increased financial stress suffered by Indigenous people, the argument for lowering the preservation age for Indigenous people grows stronger,' he says. 'Raising the (retirement) age will only make the situation worse.'
How, then, should superannuation be adapted to meet Aboriginal needs? Linda Burney, the Aboriginal member for Canterbury in the New South Wales legislative assembly, says there are many complexities to resolve.
'On the surface (reducing the retirement age) looks perfectly reasonable,' she says. 'But the practicalities of having different approaches in a regular super fund are difficult. It would be good if the big super funds took the issue seriously and had a practical discussion, which I don't think has happened. It is not as if nothing is happening. The Closing the Gap strategy is improving the life expectancy of Aboriginal people.'
A first step, apart from a willingness to discuss the issue, is to determine who should prosecute the case to change the treatment of Aboriginal superannuation.
'No-one has been put in charge of it; it is just a general discussion, a thought that has been bantered around a bit,' says Mundine. 'It is possible, as far as I am aware, to get the aged pension early if you are an Aboriginal; perhaps something similar is possible with super. But who is the best one to deal with it? If the (interested) groups are strong enough, they have to take it to NATSICC.'
Arthur argues that better education is important. 'The statistics reveal that Indigenous people spend a shorter amount of time in each job (for many reasons including short contracts, casual employment and other factors), and are more likely to have several positions over a working lifetime. The result is often small amounts of superannuation spread across several different funds.'
Developing more flexibility is another option, according to Arthur. He says that determining the time when superannuation becomes available is only part of a required rethink on 'future proofing' for future generations.
'There are currently extenuating circumstances that can facilitate the early release of superannuation. NATSICC is of the opinion that these regulations have the scope to be more individualised and to take into account a person's health, life expectancy and circumstance.'
Developing an appropriate response to the Aboriginal issue exposes a perennial tension in the sector. Superannuation is a service provided to individual savers. But it is also a system-wide initiative designed, at least in theory, to reduce government spending on the aged.
That means it needs to be matched to individual needs, but consideration also needs to be given to the wider effects on the economy and society. Changing the treatment of Aboriginals will have repercussions in the system.
'This is an issue they are starting to get their heads around, and what needs to be done about it,' says McCarthy.
David James has been a business journalist for 25 years and is the author of Managing for the Twenty First Century and The Business Devil's Dictionary. He has a PhD in English Literature from Monash University.