Super members up to $230,000 worse off from underperforming super

Industry Super Australia has called on the Senate to agree to amendments in the Your Future, Your Super bill to prevent workers being trapped in underperforming products.

It wants workers to only be stapled to those funds which have passed a performance test as up to 2.6 million workers were invested in funds that could fail a performance test, it said.

Remaining stapled to an underperforming fund for their lifetime could cost up to $230,000 in lost savings.

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It also said $500 billion would be ‘shielded’ from performance tests as they sat in the for-profit fund-dominated ‘Choice’ sector which had been found to be ‘littered with high-fee charging duds’ but was excluded from the YFYS performance tests.

ISA urged the Government to pursue amendments in:

  • Expanding performance tests to all fees and products;
  • Mandating members can only be stapled to super funds that pass the performance test; and
  • Ensuring best financial interests duties also applies to the up to $10 billion a year profit creamed off the top of members’ savings.

Bernie Dean, ISA chief executive, said: “Senators know full well that most people don’t spend a lot of time thinking about super and deserve to be protected from ending up chained to a dud fund.

“The Senate can boost members savings and stop them ending up with too many super accounts by simply mandating workers can only be stapled to the best-performing funds.”

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in breaking news ISA also agree to an immediate revaluation of all their unlisted and empty office investments.

When are you listing your residence on the ASX? After all, it is an unlisted investment.

I'm not trying to entice peoples funds into my accounts based on my view of the valuation of my residence

A good and interesting take.

You have lead me on to thinking about judging the capabilities of financial advisors. Now that we have a judge comparing super funds, maybe a judge is needed to compare performances of financial advisors - say judging the performance of their personal listed and unlisted assets over the medium term. The exam might be weeding out the less diligent ones but does not do benchmarking. I dont think you would have much to worry about given the quality of your comments over time.

Hedware, I have some snake oil for you. Don't invest in those listed assets - invest in mine, they are performing better (like magic mate) same assets mine are just performing better - I can tell - I hire experts each year or more and get them to value things proper mate - all blue sky here - I am not for profit so can deliver better than those making money.

You want some?

ps - fees good too make.

I can remember the days when A-REITs were not around and only unlisted property trusts were the only vehicle available. Wait a moment, unlisted property trusts are still around.

Unlisted assets are a legitimate investment vehicle and the high wealth used them, in part because of the lower cost. The rich on the rich list are listed because of their use of unlisted private wealth assets. Given the long run nature of super, unlisted assets are a reasonable investment for the long term.

Retail funds can invest in unlisted assets and some do.

strange how melbourne airport was revalued down by 7% or so while sydney airport shares were down around 50%. higher returns and minimal volatility. amazing.

How about promoting affordable advice in the workplace? That way people could be hundreds of thousands better off instead? Nah, just add more regulation and red tape.

Awesome, so industry funds will be wound up and rollover member funds to Vanguard, right?

Some might be. Not good to have people in poorly performing funds either non-for-profit or retail.

My thought as well, Tomo. With all the costs deducted by Industry Fund Management before the returns even get to the funds, not many would actually make the cut. :P

It can't be that easy... Two years and mediocre returns from "Choice funds" would wipe out the entire Industry Super regime.

Bring it on. :P

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