Super Consumers welcomes draft legislation on super reforms

Super Consumers Australia welcomes the release of draft superannuation legislation announced in the October Federal Budget for consultation. The reforms will deliver a far more efficient retirement savings scheme and lift the retirement living standards of Australians.

“If well implemented, the government’s package of reforms will create a better superannuation system for consumers and lift standards across the sector,” says Xavier O’Halloran, Director of Super Consumers Australia.

Superannuation account stapling means no more duplicate fees and duplicate insurance. According to the Productivity Commission this will boost the retirement savings of many Australians by $51,000. 

“Account stapling will end the wasteful mess created by millions of unintended multiple accounts and make super much easier for people to manage,” O’Halloran says. 

The YourSuper comparison tool will help people find high performing funds for their retirement savings.

“We know consumers currently struggle with the complex task of comparing super investment options. Creating a one-stop-shop for comparing funds will boost competition and provide much needed guidance to consumers.

The introduction of performance benchmarks will also drive better outcomes for members and provide appropriate guidance to people who end up in underperforming funds.

“We strongly support the introduction of an objective performance test. To drive good outcomes it will need to fully capture a person’s financial outcomes when it comes to costs and performance,” says O’Halloran.

The 16 million Australians who have a super account will welcome the stronger onus on funds to justify their expenditure of members’ money through the establishment of a new ‘best financial interests duty’.

“Evidence from the Banking Royal Commission and Productivity Commission highlighted how some super funds had lost their way when it came to acting in members’ best interests. These reforms remove the ambiguity so that funds have nowhere to hide if they mis-spend members’ money,” says O’Halloran.