The superannuation test benchmark needs to be a two-stage assessment to avoid potential automation issues, like with the Federal Government’s Robodebt program, according to the Association of Superannuation Funds of Australia (ASFA).
Dr Martin Fahy, ASFA chief executive, said there was still significant challenges to be addressed with the Your Future, Your Super bill to protect millions of fund members from unnecessary confusion and disruption.
“The Australian Prudential Regulation Authority’s (APRA’s) determination of performance should be a two stage assessment – the current benchmark test and, if a product does not pass that test, a second assessment as to whether the product is delivering good member outcomes and is likely to meet the benchmark going forward,” Fahy said.
“There can be perils when ‘automating’ decisions that should be subject to human oversight, as we saw with the Robodebt saga.”
Fahy said it was also a general principle of administrative law that decisions that materially affected citizens should be subject to review.
“These are major decisions impacting millions of Australians and they deserve to know that due process is being followed,” Fahy said.
“The Australian Securities and Investments Commission (ASIC) requires us to warn consumers that past performance is not always the best indicator of future performance.
“Many funds have recently reduced fees and we know that will lead to enhanced performance outcomes. This should be considered before good funds are consigned to the scrap heap.”