TheFinancial Planning Association (FPA)has welcomed yesterday’s introduction of super choice legislation into the federal parliament, which will result in unlimited superannuation choice for employees.
In May this year, the FPA pushed hard on the issue of super choice, making a submission to the Senate Select Committee calling for the reintroduction of the legislation.
In its submission, the FPA also called for unfettered member choice based on the principal that the individual has the right to choose their preferred fund, a fact that is reflected in the legislation.
FPA national policy and government relations manager Con Hristodoulidis says allowing individuals to choose their super fund will mean they will take a more active interest in the performance of their super assets and then change fund providers if they are not satisfied with their fund’s results.
“Under the current regime, many Australian’s super contributions can only be directed to the fund their employer or industry supports. Therefore regardless of how that fund performs or services members, the investor has no opportunity to exercise their dissatisfaction by switching fund providers,” Hristodoulidis says.
“We strongly urge the ALP and the Australian Democrats to pass the legislation as providing individuals choice of fund is an imperative step in achieving a competitive market and therefore achieve real cost reductions and product innovation,” he says.
The legislation, which has been slated for a start date of July 1, 2004 provides for unlimited fund choice. The inclusion of unlimited choice is different from the original 1997 superannuation choice bill, which allowed employers to compile a list of superannuation funds from which employees could choose.
