Industry Super Australia has criticised changes to the disclosure rules for large superannuation funds, saying there “will be next to no benefit for consumers in weak ‘transparency’ measures introduced into federal Parliament”.
“Instead, banks and their ‘for-profit’ super funds will continue to bury facts about fees and investment returns for too many of their investment option,” said Industry Super Australia (ISA).
Last week the Government introduced the Superannuation Legislation Amendment (Transparency Measures) Bill 2016 to the Parliament. The bill includes changes to the Choice Product Dashboard and Portfolio Holding Disclosure rules, changes which Industry Super Australia says will make the discosure requirements “useless”.
“The new laws only require funds to produce a public dashboard for their top 10 products, denying consumers simple, accessible information on thousands of investment options,” said David Whiteley, Chief Executive of Industry Super Australia.
“There will be no ready source of information for current or prospective members about how most of these options stack up in terms of fees or performance.”
Mr Whitely said it was incongruous for the Government to be making changes to the choice of super fund rules “while not requiring super funds to provide consumers with the information they need to make an informed decision”. The Government also introduced legislation to expand super choice to more employees covered by industrial agreements.
“The government should be requiring retail and bank-owned super funds to provide easy to understand, comparative information about all of their investment options, much like home loan comparisons,” Mr Whiteley said.
“For people to make informed choices they need all the available information, not just information retail and bank-owned super funds choose to disclose.”
“The ‘for-profit’ bank-owned funds, with their chronic underperformance, have lobbied the government to design a disclosure regime that places their commercial interests ahead of the public interest.”
ISA says that large super funds should be required to provide product dashboards for all superannuation products and investment options “with no carve outs for banks and retail funds.” ISA also wants a cost-benefit analysis of the changes to the choice of super fund rules.
The Government recently tasked the Productivity Commission with reviewing the superannuation system, including developing alternative models for setting default funds. ISA says the changes to super fund disclosure impedes this process.
“This cannot credibly be developed [alternative default super fund selection processes] in the public’s best interests unless reliable, comprehensive performance data for every investment option is made openly and transparently available to regulators, independent analysts and superannuation fund members,” said Mr Whiteley.
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