Fool’s Gold? Linking a Tax Efficient Super Fund Equity Portfolio to Retirement Savings For Members
Our new research examines whether the benefits of tax efficiency in a super fund’s equity portfolio flow through to the option unit prices their members experience. Because future (deferred) taxes are deducted from option prices, the concern is that higher portfolio-level after-tax returns from tax efficiency is like “fool’s gold” because members give back these benefits before accessing their retirement savings. We model separate tax efficient and tax naïve scenarios through the working lives and retirement of three hypothetical fund members to show how a super fund’s tax efficient equity portfolio builds higher retirement savings for members.