The announcement that the Government’s superannuation performance test will include administration fees and will be more accurate has been welcomed by Super Consumers Australia.
Super Consumers’ director, Xavier O’Halloran, said admin fees were one of the biggest drains on people’s retirement savings.
“Treasury modelling shows including admin fees will turn up the heat on even more funds, in a move that is likely to drive fast improvements to the super savings of a million more people,” he said.
“These reforms will significantly boost the outcomes for consumers, but there remains work to be done on the Your Future, Your Super package. Currently, not all investment options face scrutiny, this needs to change and be enshrined in legislation.
“It also gives wide discretion to the minister of the day to ban investments. We think scrutiny is a good idea, but we’d be better served by a regulator following a clear process.”
O’Halloran said the Australian Prudential and Regulation Authority (APRA) and the Australian Securities Investments Commission (ASIC) should be the entities to jointly exercise this discretionary power under a similar regime to other financial products they regulate.
“Predictably, the industry has used scare tactics to sink the reforms altogether rather than offer constructive feedback,” he said.
“It’s time for funds to put members first and stop trying to delay reforms. Funds have been on notice for many years that they need to drop fees and lift performance and have nearly had a year to prepare for this test. If funds aren’t ready, they aren’t doing right by their members.”
The super performance test would roll on 1 July, 2021, and the Senate Economics Legislation Committee was expected to release its report on the reforms on Thursday.
