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.
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.”
