Impact: CSIRO-Monash Superannuation Research Cluster

Over the past three years, the CSIRO-Monash Superannuation Research Cluster Program has generated a large body of research that will potentially deliver significant long-term benefits to retirees, the superannuation industry, policy makers and the Australian economy as a whole.

This high-impact research provides an independent evidence base to inform policy and promote innovation within the superannuation system, which is likely to have a major influence on economic activity and the lives of most Australians in the years ahead.

A distinctive feature of the Cluster has been its focus on combining the knowledge and expertise of key stakeholders within industry and regulatory bodies with that of outstanding researchers working as part of a multidisciplinary, international team that has access to critical industry and regulatory data  previously unavailable to researchers.

The research program has been specifically designed to maximise the impact of outcomes, particularly retirement outcomes from the perspective of fund members and retirees. In order to achieve this, it has been critical to foster industry consultation, to embed researchers with industry participants, and to develop knowledge transfer and dissemination  programs, structured in parallel with the research program.

Use the menu (above) to see how the research is being used, or jump to peer-reviewed publications, use by industry practitioners and policy-makers, reports in the media and conferences and events.

impact

  • Andréasson JG, Shevchenko PV. “Assessment of Policy Changes to Means-Tested Age Pension Using the Expected Utility Model: Implication for Decisions in Retirement”. Risks. 2017; 5(3): 47.
  • Andréasson, Shevchenko, and Novikov. “Optimal Consumption, Investment and Housing with Means-tested Public Pension in Retirement.” Insurance Mathematics and Economics 75 (2017): 32-47.
  • Bao C, Zhu, Z, Langrene, N and Lee, G 2015, ‘Multi-period dynamic portfolio optimization through least squares learning, IAENG Transactions on Engineering Sciences, World Scientific Publishing, pp. 29–42, ISBN 978-981-4667-35-7
  • Bianchi, R, Drew, M, Walk, A and Wiafe, O. “Retirement Adequacy of Indigenous Australians: A Baseline Study.” Economic Papers: A Journal of Applied Economics and Policy 35, no. 4 (2016): 359-74.
  • Chen, D, Dempsey, M and Lajbcygier, P 2015, ‘Is fundamental indexation able to time the market? Evidence from the DJIA & the Russell 1000’, Journal of International Financial Market, Institutions and Money, vol. 37, pp. 162–77.
  • Cobb-Clark, DA, Kassenboehmer, SC and Sinning, M 2016, ‘Locus  of control and savings’, Journal of Banking and Finance, vol. 73, December,  pp.  113–130.
  • Do, V, Faff, R, Lajbcygier, P, Veeraraghavan, M and Tupitsyn, M 2016, ‘Factors affecting CTA birth and fund flow’, Australian Journal of Management, vol. 41, May, pp. 324–52.
  • Drew, M, Stoltz, P, Walk, A and West, J 2014, ‘Retirement adequacy through higher contributions: Is this the only way?’, The Journal of Retirement, vol. 1, no. 4, pp. 1–18.
  • Drew, M, Walk, A and West, J 2016, ‘Withdrawal capacity in the face of expected and unexpected health and aged-care expenses during retirement’, The Journal of Retirement, vol. 3, no. 3, pp. 77–94.
  • Drew, M, Stoltz, P, Walk, A and West, J 2014, ‘Retirement adequacy through higher contributions: Is this the only way?’, The Journal of Retirement, vol. 1, no. 4, pp. 1–18.
  • Duong, Huu Nhan, Paul Lajbcygier, and Van Hoang Vu. “The Information Content of Special Orders.” Pacific-Basin Finance Journal 45 (2017): 68-81.
  • Feng, J and Gerrans, P 2016, ‘Patterns of voluntary contributions to superannuation: A longitudinal analysis’, JASSA, The Finsia Journal of Applied Finance, iss. 2, pp. 63−71.
  • Frijters, P, Johnston, D, Shields, M and Kompal, S 2015, A lifecycle perspective of stock market performance and wellbeing, Journal of Economic Behavior and Organization, vol. 112.
  • Fung, M. C., Peters, G. W., & Shevchenko, P. V. 2015. ‘A State-space estimation of the Lee-Carter mortality model and implications for annuity pricing’. In MODSIM 2015: 21st International Congress on Modelling and Simulation : Proceedings (pp. 952-958).
  • Fung, M., Peters, G., & Shevchenko, P. “A Unified Approach to Mortality Modelling Using State-space Framework: Characterisation, Identification, Estimation and Forecasting.” Annals of Actuarial Science 11, no. 2 (2017): 343-89.
  • Gerrans, Moulang, Feng, and Strydom. “Individual and Peer Effects in Retirement Savings Investment Choices.” Pacific-Basin Finance Journal 47 (2018): 150-65.
  • Gerrans, P, Strydom, M, Moulang, C and Feng, J 2016, ‘Investment strategy on retirement savings: An analysis of the experience of fund members’, JASSA, The Finsia Journal of Applied Finance, iss. 2, pp. 54−62.
  • Giesecke, J, Dixon, P and Rimmer, M 2016, ‘Modelling the macroeconomic effects of an increase in superannuation contributions, JASSA, The Finsia Journal of Applied Finance, iss. 2, pp.  72–82.
  • Hirz J, Schmock U, Shevchenko PV. “Actuarial Applications and Estimation of Extended CreditRisk+”. Risks. 2017; 5(2): 23.
  • Johnston, D, Kassenboehmer, SC and Shields, M 2016 (forthcoming), ‘Financial decision-making in the household: Exploring the importance of survey respondent, health, cognitive ability and personality, Journal of Economic Behavior and Organization.
  • Lajbcygier, P and Sojka, J 2015, ‘The viability of alternative indexation when including all costs’, International Review of Financial Analysis, vol. 38, pp.  109–41.
  • Luo, X and Shevchenko, PV 2015, ‘Valuation of variable annuities with guaranteed minimum withdrawal and death benefits via stochastic control optimization’, Insurance: Mathematics and Economics, vol. 62, pp. 5–15.
  • Pham, M. C., Duong, H. N., and Lajbcygier, P. “A Comparison of the Forecasting Ability of Immediate Price Impact Models.” Journal of Forecasting. 2017; 36(8): 898-918.
  • Ralston, D and Feng, J 2017, ‘Towards a self‑funded retirement: will superannuation substitute for the age pension?’, Australian Tax Forum, vol. 32, pp. 607-628
  • Shevchenko, P. V. and Luo X. “Valuation of Variable Annuities with Guaranteed Minimum Withdrawal Benefit under Stochastic Interest Rate.” Insurance Mathematics and Economics 76 (2017): 104-17.
  • Shevchenko, P. V., and Luo X. “A Unified Pricing of Variable Annuity Guarantees under the Optimal Stochastic Control Framework.” Risks 4, no. 3 (2016): 22.
  • Sneddon, T, Reeson, A, Zhu, Z, Stephenson, A, Hobman, E and Toscas, P 2016, ‘Superannuation drawdown behaviour’, JASSA, The Finsia Journal of Applied Finance, iss. 2, pp. 42−53.
  • Sneddon, T, Zhu, Z and O’Hare, C 2015, ‘Modelling Retirement Outcomes: a Stochastic Approach Using Australia as a Case Study’, CSIRO E-Publish: EP15094.
  • Taylor, P and Earl, C 2015, ‘The social construction of retirement and evolving policy discourse of working longer’, Journal of Social Policy, vol. 45, no. 2, pp. 251−68.
  • Tupitsyn, M and Lajbcygier, P 2013, ‘Hedge funds: Replication and nonlinearities, in Alternative Investments: Balancing opportunity and Risk, eds H Kent Baker and G Filbeck, Wiley, pp. 541–66.
  • Verikios, G, Dixon, P, Rimmer, M and Harris, A 2015, ‘Improving health in an advanced economy: An economywide analysis for Australia’, Economic Modelling, vol. 46, p. 250–61.
  • Whiteside, N, ‘Regulating markets: The governance of funded pensions in Australia and the UK’, submitted to Journal of Social Policy, 2016.
  • Whiteside, N 2014, ‘Privatisation and after: Time, complexity and governance in the world of funded pensions’, Transfer 20, vol. 1, pp. 67–79.
  • Zhu, Z and Sneddon, T 2014, ‘The impact on superannuation fund balances from the new compulsory superannuation rate’, CSIRO Digital Flagship, CSIRO e-Publish: EP147667. Zhu, Z and Sneddon, T 2015, How much superannuation is needed to have a comfortable or modest retirement, CSIRO Data61, CSIRO e-Publish: EP158090.

An important element underpinning the delivery of evidence-based, industry-relevant research by the Cluster has been its focus on stakeholder and industry engagement.

The Cluster has actively sought to develop a strong understanding of industry needs and increased collaboration between academe, policy makers and industry participants by providing a range of opportunities for networking, the sharing of ideas and reporting on research findings. These include:

Quarterly stakeholder meetings: These meetings are well-attended and have excellent participant engagement, providing an indication of the value placed by stakeholders on the research work of the Cluster. As part of these meetings regular presentations to stakeholders are given by the research teams, providing opportunities for feedback from stakeholders on key findings and suggestions on areas for further research.

Presentations to individual stakeholder organisations: Some of the papers focusing on issues with important implications for industry and policy makers have been identified by stakeholders and have resulted in additional presentations/discussions on specific research topics. Key recent examples include: a presentation in May 2016 by the team from Griffith University to Treasury (Commonwealth) on their work on Indigenous retirement outcomes and sequencing risk; a teleconference meeting between CSIRO and stakeholders to discuss the robo-advice study; a one-day seminar for AMP, including presentations from CSIRO on digital issues and from researchers focusing on behavioural research; and a presentation to the Australian Taxation Office on superannuation drawdown behaviour during retirement

Presentations to industry conferences: A number of presentations have been made by researchers and Cluster Leader Prof Deborah Ralston at conferences including: 22nd Annual Colloquium of Superannuation Researchers at the University of New South Wales in 2014; ASFA Global Investment Forum in Sydney in 2014; ATO Super Leadership Conference in Canberra in 2014; and Allianz – Oxford Pensions Conference in 2014, Pension Options – Risk and Behaviour, University of Oxford.

Annual international conference: The CSIRO-Monash Superannuation Research Symposium is held annually. These events provide an excellent forum for researchers to network, exchange ideas and share their research findings with industry professionals, policy makers and others in academe.

Publication in leading academic and industry journals: Several of the Cluster researchers’ papers have also been accepted by highly regarded academic journals including The Australian Journal of Management, the Journal of Banking and Finance and JASSA, The Finsia Journal of Applied Finance, which ran a special supplement on superannuation with four Cluster papers in its June 2016 issue.

Submissions: These include a submission to the Financial System Inquiry, in 2014, and to Treasury’s Review on The Objective of Superannuation, in 2016.

Newsletters publicly reporting updates on programs: These newsletters are provided online to stakeholders tri-annually, including updates on the progress of research, details on papers that have been published in journals, and stakeholder presentations and events.

Website: The Super Cluster website is a repository of information on all matters to do with the research programs,  the researchers, and outcomes and also links to other relevant sites.

Use of Cluster research in policy reviews: The Productivity Commission’s 2016 Report on Superannuation Competitiveness and Efficiency drew heavily on Cluster research, citing five Working Papers on behavioral issues including investment and contribution decisions, advice seeking, and drawdown patterns, as well as presentations delivered at the 2015 Annual Conference. A 2015 report from the Productivity Commission, Superannuation policy for post- retirement, also drew on Cluster research into superannuation contribution  decisions.

Opinion pieces: Cluster leaders and researchers have published a number of opinion pieces, promoting Cluster research to a broader audience:

  • Duffield, J and Ralston, D 2016, ‘Three key retirement factors other than super’, Cuffelinks, 26 October
  • Feng, J, Bateman, H and Gerrans, P 2014, ‘Why Australians don’t make extra super contributions’, The Conversation, 15 April, republished at Lifehacker.
  • Palmer, C, Dormer, A, Ralston, D and Thorp, S 2014, ‘CSIRO- led research to model superannuation spending’, The Conversation, 10 February.
  • Ralston, D and Feng, J 2016, ‘Superannuation and the budget’, Cuffelinks, 3 May.
  • Ralston, D and Feng, J 2016, ‘Super changes in budget are a step forward in addressing equity’, The Conversation, 5 May.
  • Wiafe, OK 2016, ‘Indigenous Australians retire with 27% less savings’, The Conversation, 11 February, republished at Business Daily.
  • Reeson, A, Duenser, A and Lochner, M 2017, ‘Computer says no: robo-advice is growing but we still don’t trust it, The Conversation, 4 August.
  • Giesecke, J and Nassios, J 2017, ‘Here’s how superannuation is already financing homes’, The Conversation, 13 April.

The Cluster has received ongoing media coverage over the course of the research program. Key examples include:

Over the past three years, the Cluster has provided a number of forums for researchers to engage with, inform and consult with stakeholders, including regular stakeholder meetings and a major annual conference to refine and explore the research.

> 2013: The Cluster was launched in August 2013 at an event where the keynote speaker was Simon McKeon AO, then Chair of CSIRO and AMP, and Executive Chairman, Macquarie Bank, Melbourne. The event was attended by 60 key members of industry and academe.

SM
Simon McKeon AO, CSIRO

The first international conference was held on 4 and 5 December 2013, including a stakeholder meeting on 5 December. The conference was attended by 53 members of industry and academe, with 14 papers presented on: Infrastructure Investment Issues and Macro Outcomes (three papers), Member Behaviour (three papers), Health,Labour markets and Social Policy (five papers), and Investment & Products (three papers).

DR2
Deborah Ralston, Cluster Leader

> 2014: During 2014 stakeholder meetings were held on 17 March, 16 June, 30 September and following the annual conference on 2 December. A workshop was also conducted with stakeholders on 5 August. At each meeting, work in progress was reviewed and forthcoming research was discussed.

In 2014 several researchers, including (the late) Dr Maria Strydom, Carly Moulang, Jun Feng and colleagues from the University of Warwick, attended the Oxford Conference − October 2014 as guests of Prof Gordon Clark. The conference provided an opportunity to share insights with key pension policy makers and industry members from around the UK, Europe and the US.

JFCMMS
Jun Feng, Carly Moulang, Maria Strydom, Monash University

> 2015: 2015 stakeholder meetings were held on 11 March, 15 June, 23 September, and after the annual conference. The conference was held on 1 and 2 December in Melbourne once again and attracted 87 attendees from industry academe and government agencies. The Plenary Speaker was Professor Gordon Clark (Oxford University). In total, 19 papers were presented under two concurrent streams: technical and investment topics; and member behaviour, retirement, wealth and health.

GC
Gordon Clark, Oxford University

> 2016: In 2016, stakeholder meetings were held on 10 March, 23 June and on 15 September. A workshop was also conducted at AMP in October on the digital advice project. A further stakeholder meeting was held prior to the annual conference.

The final annual CSIRO-Monash Superannuation Research Symposium was open to the public on 6 December 2016. The symposium included presentations  by both international and Australian researchers. Keynote speaker was Karen Chester, Deputy Chair of the Productivity Commission, who is current;y conducting the Commission’s Inquiry into Superannuation Competitiveness and Efficiency. Eleven papers were presented at the conference from across the full spectrum of superannuation research.

KC
Karen Chester, Productivity Commission