Super industry wants consultation on Govt's Budget changes
The superannuation industry has signalled it is not significantly opposed to the Federal Government’s latest Budget superannuation measures but has called for more detail and consultation around how it will ultimately work.
Deloitte superannuation partner, Russell Mason, set the tone for the industry’s reaction to the Your Future, Your Super measures announced in the Budget by stating while stapling members to a particular fund and subjecting funds to an annual objective performance test had merit, the industry needed to see the specifics.
“And I hope there will be significant consultation to ensure that these proposals work as they are intended to,” he said.
Mason’s views were echoed by Association of Superannuation Funds of Australia (ASFA) chief executive, Dr Martin Fahy, who said the devil would be in the detail.
“ASFA supports measures to lift standards for MySuper in order to improve retirement outcomes for superannuants, and how these changes are made needs to be carefully considered,” he said. “We don’t suffer from a shortage of good funds and we need to ensure that these measures don’t reduce competitive intensity or damage the nation building role of superannuation.
“In the absence of the release of the Retirement Income Review and the lack of specificity in the Budget papers, it is unclear how the changes will work in practice or what the implications will be for competition, efficiency and incumbents in the sector.”
Australian Institute of Superannuation Trustees (AIST) chief executive, Eva Scheerlinck, also called for greater detail.
“We will need to see the stapling scheme in more detail, but we do have a number of concerns. There is the danger of people being mis-sold or stapled to an underperforming fund outside the default system. It is also a concern that there may be individuals who find themselves uninsurable because they are stapled to a fund whose insurance does not cover their occupation.
“There is no place for underperformance in defaults but the Government has failed to address the greatest area of consumer harm in super which is outside the default system.”
Industry Super Australia (ISA) also expressed concern about people finding themselves stapled into a dud fund.
Recommended for you
Financial Services Council chief executive, Blake Briggs, is urging Minister for Financial Services, Stephen Jones, to take advantage of the QAR opportunity to reduce regulatory duplication and ensure advice is affordable.
Former chair of the House of Representatives’ Standing Economics Committee, Tim Wilson, is planning a return to politics after losing his seat in the 2022 federal election.
Morningstar is going to offer research ratings of funds in the $3.5 trillion superannuation sector for the first time in response to demand from financial advisers.
Treasurer Jim Chalmers has opened a consultation into the design of the annual superannuation performance test, canvassing views on a range of reform options.
