Underperforming MySuper products costing millions in retirement
Research from Super Consumers Australia, the consumer research group backed by Choice, shows the superannuation system put over 176,000 people into a poor performing MySuper product in 2017-18 costing up to half a million dollars in retirement.
Those accounts were put into MySuper products in the bottom 25% of performers, which joined over one million total accounts held in those same MySuper products.
The Productivity Commission (PC) had concluded there was chronic underperformance of MySuper products and a person unlucky enough to be defaulted into one of these would be $502,000 worse off by the time they retired.
Super Consumers Australia has urged the Federal Government to take on the PC and Royal Commission reports to end the creation of duplicate accounts and ensure people are defaulted into the best performing funds.
Xavier O’Hallaron, Super Consumers Australia acting director, said these superannuation “laggards” continue to attract tens of thousands of new members each year through badly designed default system.
“What’s worse is that we know the industry is resisting changes which would ensure people end up in better performing products,” O’Hallaron said.
“The Productivity Commission proposed a suite of options, including ‘best in show’, which would have the immediate effect of stopping more people’s retirement savings ending up with products that would cost them in retirement.”
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