16657 Lecture Notes - Lecture 6: Leaseback, Reinsurance, Private Equity
Document Summary
Currently the real returns associated with cash with very low. Suggest reasons why a superannuation fund manager would be holding high proportions of cash. Cash is a very safe investment and has a steady return that meets that of inflation. Being a super fund it is important that when their clients are nearing retirement that their investment is safe and less risky than that of a 20-year-old. Cash is also the most liquid form of investment. Compare the investment strategy for a superannuation fund with that of the manager of a statutory fund managed by a life insurance company. Superannuation is a compulsory payment of 9. 5% of a worker"s wage or salary. Employers are required to make these payments on behalf of their employee. Contributors cannot withdraw the funds from this until retirement, allowing earnings to compound over a period of time.
