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Lack of disclosure will threaten compare the pair: ISA
Exempting the bank-owned and retail superannuation sector from requirements to disclose their investment returns, fees, and costs on proposed product dashboards for super funds would hinder consumers from comparing the pair, according to Industry Super Australia (ISA).
The Federal Government's proposals carved out bank-owned super funds held through platforms and some legacy products from having to disclose dashboard details, which would mean bank-owned super products would not have to reveal many of their underlying investments costs, ISA said.
The proposal would mean around 72 per cent of bank-owned and retail funds would be exempt.
The government was also looking to remove current limited exemptions to choice of fund legislation introduced by the Howard Government at the behest of employers, which ISA said cover less than seven out of 100 Australian employees.
ISA chief executive, David Whiteley said: "It is unsurprising that the banks oppose having to disclose the performance of their super funds in an easily comparable and transparent manner".
"We are concerned that these proposals have not been through a rigorous evaluation. In their current form the proposals are internally inconsistent, seeking to extend choice of fund without providing consumers with the necessary information to make informed decisions."
In its submissions to the Treasury, ISA has recommended the Government not continue with the changes until the product dashboard regime includes all super products and investment options with no exemptions for banks and retail funds.
It has also asked for a cost benefit analysis of the proposals to remove the Howard Government's choice of fund rules.
It is not good enough that the banks want to hide their chronic under-performance from consumers", Whiteley said.
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