Shadow Minister for retirement incomes and savings Senator Nick Sherry told today’sInvestment and Financial Services Association(IFSA) conference that a Labor government would seek to cap fees and commissions chargeable on an employee’s superannuation guarantee contribution.
The capping of fees was part of a raft of superannuation policy options that Sherry announced to the conference, in which he slammed the Government’s intentions of deregulating the super industry to enable full choice of fund.
Sherry says in addition to the problem of extra fees employees would have to pay under a new choice of fund regime, there is also the problem that 8 million Australian super fund members would be forced to participate in financial investment, and will be pushed to seek out advice.
“A good many will seek out advice — advice they do not currently receive or need in our regulated system,” Sherry said.
“The need to seek advice will add a significant extra cost structure to a compulsory system.”
Sherry claimed that super fund members in the unregulated retail market are faced with having to pay too many fees in the present system, which would only increase once the Government’s proposed choice of fund regime was up and running.
“Remove the structural regulation and these excessive fees will spread, over time, right through the system.”
He also said Labor would improve disclosure of fees and charges, as “the current FSR requirements aren’t good enough”.
Other policy details included automatic consolidation for accumulation accounts unless a member elects otherwise; prohibition of entry and exit fees; Labor’s version of choice, which disallows any veto of employee choice made by any mechanism; and prohibition of commissions from fees on health insurance and aged care resulting from the capping of fees and charges that can be directly debited against the compulsory SG for a standard product.
Sherry also said the provision of investment choice within a fund, which included an ethical investment choice, should be mandatory for all funds.
He also reiterated policy he announced some weeks ago that would see the Government compensate fully the losses super fund members suffered as a result of theft or fraud by fund directors or trustees, rather than the 90 per cent which is currently guaranteed by the present Government.
