‘Your Future, Your Super’ reforms will leave Australians with more in retirement: Super Consumers Australia

Consumer advocacy group Super Consumers Australia welcomes the ‘Your Future, Your Super’ reforms announced in the Federal Budget tonight.

“Overall, the government’s ‘Your Future, Your Super’ reforms create a better superannuation system for consumers and lift standards across the sector. These reforms will leave more people with more money in retirement,” says Xavier O’Halloran, Director of Super Consumers Australia.

“As the Treasurer noted in his speech tonight, Australians are paying far too much in fees across multiple accounts. These reforms clean up zombie accounts that have eaten away people’s retirement savings for too long.”

“The ‘Your Future, Your Super’ reforms are a good start to ensuring that all Australians get a fair deal from our superannuation system. We look forward to working with the government to implement these reforms and to further tackle high fees and unfair conditions that consumers face when building their retirement savings.”

Further comments attributable to Xavier O’Halloran, Director of Super Consumers Australia:

Comments on account stapling and comparator tool

“Right now, if you start a new job or take on a second job then the superannuation system will create a new account with a new fund for you by default. The Government’s proposal to ‘staple’ superannuation accounts will make sure that unnecessary duplicate accounts aren’t created.

“Superannuation account stapling means no more duplicate fees and duplicate insurance, creating a huge saving for people over their lifetimes.”

“The government has rightly recognised that for stapling to work the system needs to support people to find good performing funds for their retirement savings. We look forward to working with the government as it develops the proposed YourSuper comparison tool to inform consumer decision making.”

Comments on the proposed annual performance tests

“The Productivity Commission’s inquiry into superannuation made it clear that there are too many underperforming products in the market, costing members millions in lost retirement savings.”

“Super Consumers Australia supports the Government’s announcement that it will require superannuation products to meet an annual performance test to protect members from poor outcomes and encourage funds to lower costs. It will be important for the test to include the right mix of performance indicators and we look forward to working with the Government and regulators to ensure this.”

“Requiring products that fail the test to inform their members and preventing persistently underperforming products from taking on new members is a good start. However, measures are also needed to ensure that existing members aren’t disadvantaged by underperformers. We look forward to working closely with the Government and regulators to design a system that means existing members within underperforming funds can smoothly transition to a better deal.”