Advanced Search

Share Coverage



Category: Business, Economics and Finance / Consumer Finance / Consumer Protection / Superannuation

Superannuation group warns consumers could lose out if employers choose retirement fund

Wednesday, 21 Sep 2016 12:17:22 | Michael Edwards

APRA licenses more than 100 MySuper products on the market. (ABC News)

A superannuation group has warned that consumers could lose out if employers are allowed more leeway to choose their default workplace retirement fund.

The Federal Government's Productivity Commission is reviewing the default superannuation fund system, MySuper, for workers who have not selected a workplace super fund.

There are more than 100 authorised MySuper products on the market, which are licensed by the banking regulator, the Australian Prudential Regulation Authority (APRA).

The Commission is examining what it calls "alternative default models" including a system to increase competition where funds would bid to be the default fund for employees.

External Link: PC tweet

The Financial Services Council said it would welcome such a change as "the barriers to competition in the superannuation industry are well known and long overdue for reform".

But Tom Garcia, chief executive of the Australian Institute of Superannuation Trustees, told The World Today that the current system, where a default product is chosen from a super fund named in industry awards, works well.

"We believe the current system is very good. It serves almost two thirds of the working population of Australia now successfully," he said.

"If it was carte blanche, open slather, you would have employers having to choose from 116 super funds, so I don't think they'd be that excited."

Workers already have the right to choose their own super fund but most stick with the default fund selected by their employers.

All of the options put forward by the Productivity Commission have to be considered on whether they leave ordinary people better or worse off than if they had been forced to choose their own fund.

It said the existing default fund system could be more efficient and competitive.

"There are issues around conflicts of interest or deals and bank bundling which is undertaken, which is a cause for concern," said Matt Linden, director of public affairs at Industry Super Australia.

"It is imperative that there's an efficient, merit-based process for the identification and selection of default funds," he told the World Today.

The Federal Government is opposed to industry super funds because of their links to the union movement.

AustraliaPlus


 

Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.

沪公网安备 31010602000204号

Email this to your friend