The Australian Securities and Investments Commission’s (ASIC’s) deferral of consumer disclosure requirements for Choice superannuation products could negatively affect retirement outcomes for “millions of unsuspecting Australians”, a major industry body has warned.
The regulator announced earlier this week that fund trustees would have a reprieve on enacting the Choice product platforms until as far away as 2023, as the Government was yet to regulate on what the disclosure requirements would be.
Australian Institute of Superannuation Trustees (AIST) chief executive, Eva Scheerlinck, said this was a “significant blow” to members in underperforming Choice options, who would remain in the dark on their funds’ performance until the deferral ended.
“This delay is disgraceful. In a post-Royal Commission environment, we should be prioritising action to help consumers get out of underperforming funds. Kicking the can down the road another four years is unacceptable,” Scheerlinck said.
“Currently, members of many underperforming Choice super products have no way of knowing how their fund compares to industry benchmarks.
“Waiting another four years to get disclosure right could mean another four years of dud returns for the members affected … In the 21st century we should be able to shine a light on underperformance.”
The Productivity Commission estimated in January this year that more than a third of Choice products were underperforming, recommending that Choice product dashboards be enacted as soon as possible. There was significantly more super invested in Choice products than their more highly-regulated MySuper counterparts.
Scheerlinck called on ASIC to make improving disclosure in superannuation a high priority in the wake of the Productivity Commission’s finding, saying that it was a “vital step” in addressing underperformance.