Proposed super laws inadequate: AIST

6 January 2021
| By Jassmyn |
image
image
expand image

The Government’s proposed superannuation laws fail to adequately address underperformance and this needs to be addressed before stapling begins, the Australian Institute of Superannuation Trustees (AIST) believes.

In a submission to the Government’s Your Future, Your Super legislation, AIST said while it supported the intent of the legislation to empower members and hold funds accountable for performance, it would not be achieved without substantive changes to the legislation and additional measures.

It said the proposed legislation only required some products to undergo performance testing and ignored Productivity Commission recommendations to allow the regulator to wind up underperforming funds.

AIST chief executive, Eva Scheerlinck, said: “The new laws will see many disengaged members stapled to dud super products where they could languish for years.

“The priorities of this legislation are the wrong way around. Underperformance in our super system must be substantially addressed before any stapling occurs.”

She said another concern was the Government’s reliance on consumer disclosure as the primary means to get members to switch out of underperforming super products.

“When it comes to complex financial products such as superannuation, the Productivity Commission, ASIC [the Australian Securities and Investments Commission] and the Hayne Royal Commission have all previously warned about the dangers of relying heavily on disclosure to improve consumer outcomes,” Scheerlinck said. 

“Rather than putting the onus on individuals to take action on their fund’s underperformance, as per the Productivity Commission’s recommendation the Government needs to give the regulator the power to transfer existing members of all underperforming products to better products.”

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. ...

11 months ago
Kevin Gorman

Super director remuneration ...

11 months 1 week 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 ...

11 months 1 week ago

Jim Chalmers has defended changes to the Future Fund’s mandate, referring to himself as a “big supporter” of the sovereign wealth fund, amid fierce opposition from the Co...

1 day 5 hours ago

Demand from institutional investors was the main driver of growth in Australia’s responsible investment (RI) market in 2023, as the industry continued to gain momentum....

1 day 5 hours ago

In a new review of the country’s largest fund, a research house says it’s well placed to deliver attractive returns despite challenges....

1 day 6 hours ago