Mixed industry reactions to YFYS bill passage

18 June 2021
| By Jassmyn |
image
image
expand image

While the Financial Services Council (FSC) has welcomed the Your Future, Your Super reforms which were passed by the Senate on Thursday, Industry Super Australia (ISA) and the Australian Institute of Superannuation Trustees (AIST) believes workers could be the big losers from the passage.

FSC chief executive, Sally Loane, said the council supported the “stapling” recommendation as having a single superannuation account would save Australian workers up to $1.8 billion in fees over the first three years.

Loane also pointed to the performance benchmarks for super products and said this would work alongside stapling to give members “confidence” their super was generating “best in show” investment returns.

“The challenge now for the regulators and Government is to ensure performance assessments use rigorous and comparable data for all products so that comparisons are undertaken on a ‘like-for-like' basis,” she said.

However, ISA said at least 2.6 million super fund accounts were locked in funds that could fail the performance test.

It also said over $500 billion of members savings were “shielded” from the performance test and that it would push the Government to ensure the funds they carved out were included in the test.

ISA chief executive, Bernie Dean, said: “We’ll monitor the impact of the bill and may press future Parliaments to mandate that Australians can only be stapled to the best-performing funds and not the worst ones.

“After almost universal criticism the government was forced to drop a number of ideological proposals and to improve the performance tests for funds, but sadly it stopped short of protecting workers from losing their savings by being stuck in a dud super fund.”

Similarly, AIST chief executive, Eva Scheerlinck, said: “AIST remains deeply concerned that these legislative carve outs provide incentives to unscrupulous providers to push high fee, under-performing products onto unsuspecting consumers.

“Many Australians could remain stapled to dud products for life and be none the wiser as their super fund won’t be subject to performance testing.”

She said addressing underperformance should be the responsibility for the regulator, not consumers.

“Expecting all members in an underperforming fund to respond to a letter and take appropriate action places a huge burden on individuals to ‘fix’ their super,” Scheerlinck said.

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest developments in Super Review! Anytime, Anywhere!

Grant Banner

From my perspective, 40- 50% of people are likely going to be deeply unhappy about how long they actually live. ...

10 months 2 weeks ago
Kevin Gorman

Super director remuneration ...

10 months 3 weeks ago
Anthony Asher

No doubt true, but most of it is still because over 45’s have been upgrading their houses with 30 year mortgages. Money ...

10 months 3 weeks ago

The central bank has served up a disappointment for punters on Melbourne Cup Day....

39 minutes 9 seconds ago

The fund’s inaugural chief retirement officer is looking to establish a new venture. ...

5 hours 26 minutes ago

The sovereign wealth fund remains cautious of the impact of high inflation as it announces a strong return in its latest update....

23 hours 30 minutes ago