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Fix default superannuation arrangements: Mathias Cormann
The Government should act immediately to fix the current closed shop, anti-competitive arrangements for the selection of default superannuation funds, according to Shadow Assistant Treasurer and Shadow Minister for Financial Services and Superannuation, Mathias Cormann.
Cormann said the Government should not use the current Productivity Commission review as an excuse to do nothing for another year, and was critical of the time already taken by the Government to initiate the process.
The current process is not transparent, not competitive and inappropriately favours union-dominated industry superannuation funds, and should be fixed as soon as possible, he said.
Coalition members of the Parliamentary Joint Committee on Corporations and Financial Services recommend that any authorised MySuper product should be able to compete freely in the default superannuation market, Cormann said.
The Coalition has also said the MySuper bills could be improved by:
- clarifying the definition of 'large employer' as any employer with 500 or more employees
- removing the need for individual registration for each tailored MySuper plan
- removing the scale test and providing a comprehensive definition of 'intra-fund advice' to ensure it is general only, and
- any personal financial advice provided through a superannuation fund be paid for by the person accessing this advice.
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The future of superannuation policy remains uncertain, with further reforms potentially on the horizon as the Albanese government seeks to curb the use of superannuation as a bequest vehicle.
Superannuation funds will have two options for charging fees for the advice provided by the new class of adviser.
The proposed reforms have been described as a key step towards delivering better products and retirement experiences for members, with many noting financial advice remains the “urgent missing piece” of the puzzle.
APRA’s latest data has revealed that superannuation funds spent $1.3 billion on advice fees, with the vast majority sent to external financial advisers.
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