A substantial portion of the Australian superannuation industry are ill-prepared for the Government’s new choice of fund regime, according to the findings of the latest IUS/Super Review Super Outlook survey.
The survey, conducted throughout March including at the Conference of Major Superannuation Funds (CMSF), shows that 60 per cent of respondents do not believe that the industry is sufficiently prepared for choice of fund.
Perhaps more importantly, around 40 per cent of survey respondents believe the advent of choice of fund will have a negative impact on superannuation funds in Australia, with only around 45 per cent of respondents believing that choice would generate a positive outcome for the industry.
The survey also revealed a strong majority of respondents who believed the Government had simply not moved quickly enough to put the necessary framework in place.
The choice regulations were released by the Government in early March but close to 86 per cent of respondents said they did not believe the Government had moved quickly enough.
Notwithstanding this result, respondents were fairly evenly divided on the question of whether employers had had sufficient time to prepare for choice of fund.
The survey tested the views of a wide range of respondents from superannuation fund trustees and fund executives through to fund managers and financial advisers.
Commenting on the survey findings a spokesman for independent economic surveying and analysis firm, Classical Economic Analysis said it contained some significant messages for both the Government and the industry.
“What the data indicates is that while respondents accept that choice of fund has arrived, they remain highly skeptical about the sorts of benefits it is likely to generate,” he said.
The spokesman pointed to the responses relating to the impact of choice on the outsourcing of corporate superannuation.
“Most respondents (81 per cent) believe choice will hasten the outsourcing of corporate superannuation, yet they remain divided about the benefits which will flow from this phenomenon,” he said.
The spokesman said it was significant that opinions were also divided on the question of whether choice would create further opportunities for outsourcing consultants.
“While 46.2 per cent of respondents believe choice will deliver further business opportunities for consultants, only 46.2 per cent believe that its impact will be significant,” he said.
