INCREASING PEOPLE’S SUPER SAVINGS CAN’T WAIT

Super Consumers Australia calls on parliament to ignore the self-interest in the super sector and pass reforms. 

The Your Future, Your Super reforms will finally kill duplicate accounts that have eaten away people’s savings for decades, while shining a light on performance. Failure to act will see another 850,000 duplicate accounts created this year. The industry’s failure to address these duplicates has seen a typical worker’s balance reduce by $51,000 in retirement.

“This legislation will finally free people from the scourge of duplicate accounts. Coupled with performance testing, super funds will face real repercussions if they fail to deliver good returns on people’s retirement savings,” says Xavier O’Halloran, Director of Super Consumers Australia. 

Some industry players have embarked on a self-preservation mission, failing to recognise the intersecting impact of each of the measures.

“This questionable framing from part of the industry assumes stapled funds will continue to underperform for an extended period of time. This ignores the positive impact the performance test will have in requiring dud funds to shape up or lose access to customers,” says O’Halloran.

“The proposed Your Future, Your Super laws will help consumers but can be made even stronger. The law currently leaves core obligations to the regulations and doesn’t apply scrutiny to administration fees and some super products.”  

Super Consumers modelling shows that there are five super products that are not considered underperformers that would fail the proposed test if administration fees are included. 

“This legislation is about making sure super funds act in the best interests of members. If it is going to deliver on this intent it needs to apply performance tests to all products and apply scrutiny to administration fees. Lowering fees by just 0.5% could see a typical person retire with an extra $55,000,” says O’Halloran.

Super Consumers calls on the Senate Economics Legislation Committee to recommend the Bill be passed with amendments to capture administration fees and apply performance tests to all products by 1 July 2022.