An ASIC report notes the boom in demand for this asset, saying it heightens the need for “better-quality data” about the size of this sector where estimates range between $1.8 billion and $188 billion.
CPA Australia has weighed into the debate about the cost to oversee the industry, adding its voice to those who argue the fee structure favours the larger funds.
Does tax deductibility increase retirement saving?
This paper presents new evidence on how employees respond to tax incentives for retirement saving. Using administrative data from a large retirement plan administrator in France, we examine the voluntary saving choices of approximately 1.4 million workers before and after the implementation of the 2019 Loi Pacte, a reform that introduced tax-deductible voluntary contributions into employer-sponsored retirement plans. One of the features of this multi-part reform was a change in the provisions for voluntary individual contributions to employer- sponsored saving plans. While such contributions were previously allowed on an after-tax basis, similar to Roth IRAs and 401(k)s in the US, the reform allowed pre-tax contributions that provided an immediate tax deduction for contributors. The reform increased contributions to retirement saving accounts, especially among higher-income, older workers and those who contributed to a voluntary saving plan on a post-tax basis before the pre-tax option became available. We also observe workers’ contributions to “medium term” saving plans that are provided by employers and can be accessed after five years; we do not find any substitution between contributions to these accounts.
