Super industry bodies urge Cooper reconsideration

Superannuation association industry bodies have urged the Cooper Review, in a joint submission, to reconsider its superannuation recommendations contained in the review's preliminary report, labelling them unnecessary and expensive.

The Association of Superannuation Funds of Australia, the Australian Institute of Superannuation Trustees, the Investment and Financial Services Association, and the Corporate Super Association urged the Cooper Review to reconsider its recommendations in relation to the proposed 'choice architecture model' for super.

Super associations said that while they acknowledged the need for creating governance structures to fit the circumstances and needs of super members, they did not believe that the implementation of 'choice architecture' outlined in the preliminary report would advance that policy objective.

The proposed model did not focus on making the system more efficient, and would fundamentally alter an existing structure that has served members well, the submission said.

It also warned that the application of the model would be detrimental in both the short term and the long term to members' practical interests, and add additional layers of cost, complexity, and a heavier administrative burden.

The submission stated that in an attempt to shift administration costs on those members who use super the most and protect those who use super the least, the proposed model would result in the opposite effect.

The associations did not accept that those members in a default or balanced fund were disengaged with super, and it would be difficult to see whether a member was making an active choice in his super without direct consultation.

"All of the leading super industry bodies are united in the belief that the changes proposed by the Cooper Review, in its preliminary report issued on 14th December, are unnecessary and will not ultimately benefit members of funds," the submission said.