The Productivity Commission has released its framework for assessing the performance of the superannuation system, though the industry is concerned it could increase costs – which will be passed on to members.
The Productivity Commission has released its report How to Assess the Competitiveness and Efficiency of the Superannuation System, the first of its three-stage review of the super system.
“This first stage provides transparency and certainty to the superannuation industry about how it will ultimately be assessed in our forthcoming review of the system’s efficiency and competitiveness,’ said Productivity Commission Deputy Chair, Karen Chester.
According to the Commission the framework has been designed to “minimise the compliance burden on industry”, among other things, and the majority of indicators rely on data that already exists in some form.
However the Association of Superannuation Funds of Australia (ASFA) is concerned that the scope of the proposed framework will impose a higher administrative burden on the industry – increasing costs, which will be passed on to members.
ASFA CEO Dr Martin Fahy said the “89 unique indicators and 22 criteria” in the framework would make if difficult for the Commission to draw meaningful conclusions.
“It is a challenging task to measure the efficiency and competitiveness of the superannuation system and ASFA appreciates that the Productivity Commission has recognised feedback on the need to analyse the impact of regulation,” he said.
“While some of the reporting is voluntary, ASFA remains concerned the assessment process will impose an unnecessary burden on the industry in terms of additional data.”
“Ultimately, higher data costs for industry are borne by members and the industry is already subject to extensive data reporting and compliance requirements.”
The Commission continues with its inquiry to develop alternative models for allocating default super funds, before moving on to the third stage – the review of the efficiency and competitiveness of the superannuation system.