The Federal Government should use the upcoming federal budget to improve protections for super fund members after the report from the Productivity Commission revealed structural flaws, financial advisory firm Dixon Advisory has said.
According to the aforementioned report, there were a staggering 10 million unintended duplicate super accounts and that meant balances would continue to be eaten away by duplicate fees.
Also, persistent underperformance turned out to be a significant problem for around 6.6 million super accounts in the MySuper and default sector, with a member’s super balance being $500,000 less at retirement if members were in a super fund performing in the bottom quarter of funds compared to those in the top 25 per cent.
“The cost of retirement is one of the biggest challenges all Australians face – but we also know that many people find super and selecting an appropriate super fund very complex - so having an efficient system and getting the right advice, is critical,” Dixon Advisory’s head of advice, Nerida Cole, said.
“The research and recommendations in the Productivity Commission’s report are extensive and if agreed by the government, will take some time to implement.”
According to Dixon Advisory, the rest of the Protecting Super Package announced in last years’ Budget should be addressed by the Australian Parliament as soon as possible.
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