ASFA questions MySuper claims

One of the central recommendations of the Cooper Review into superannuation, MySuper, will not succeed in substantially reducing costs, according to the Association of Superannuation Funds of Australia (ASFA).

In a submission filed with the review, ASFA said that while it was broadly supportive of the underlying intention of the MySuper proposal, it questioned the validity of claims that it would lead to a substantial or possibly any reduction in costs.

ASFA said that unlike the Cooper Review proposals to improve the administrative arrangements around superannuation via its so-called SuperStream proposals, any reduction in costs associated with MySuper would not be of the magnitude claimed in the report and accompanying media release.

It said another area of concern raised by ASFA members was that the proposed MySuper solution was "unnecessarily over-engineered and complex".

"They (the ASFA members) contend that similar outcomes could be achieved under existing structures without the need to introduce a new universal MySuper regime, which seems to be creating a two-tier governance structure - one for MySuper accounts and a different one for choice accounts," the submission said.

It said the Cooper Review panel's stated view that many existing default funds already had most of the features of a MySuper product was valid and raised questions about why a new regime was required.