NAB says extending choice of super fund to all employees, as recommended by the final report of the Financial System Inquiry, is “crucial to increase competition” in the superannuation system.
NAB is also, broadly, supportive of the other superannuation-related recommendations of the Financial System Inquiry (FSI), in a submission on the final report.
Extend super choice to all employees
NAB supports the recommendation to extend choice of superannuation fund to all employees, saying that “choice of fund is crucial to increase competition.”
“The ability of employees to choose the fund into which their Superannuation Guarantee contributions are paid is an important step in creating a more competitive and dynamic superannuation industry.”
However NAB says extending choice of fund will also increase costs, due to additional administration, though SuperStream and clearing houses “means that the Australian superannuation system in now constructed to facilitate choice.”
Objectives for superannuation system
The FSI final report recommended that the objectives of the superannuation system should be enshrined in legislation. NAB supports this recommendation, and suggests a number of objectives:
- Boost the retirement incomes for all working Australians
- Raise the level of self-sufficiency amongst Australia’s retirees
- Enhance the outcomes for those who qualify for a government pension
- Boost the pool of national private savings
- Establish a regulatory framework that protects retirement savings
- To enhance competition for the management and investment of private savings
NAB says the summary of these objectives would be “improving living standards in retirement whilst reducing the cost of an ageing population to the Government (through the current and future taxpaying population).”
Improving efficiency in the superannuation system
NAB “partially agrees” with the FSI recommendation for a ‘formal competitive process’ to determine default superannuation funds unless the Stronger Super reforms are shown to have significantly improved competition and efficiency of the super system.
NAB does agree that the Productivity Commission should conduct an inquiry into efficiency of the superannuation system. Though the submission recommends this inquiry be conducted from 2017, allowing time for the full implementation of the MySuper reforms, instead of by 2020 as recommended by the FSI.
NAB supports the FSI recommendation for super fund trustees to pre-select a ‘comprehensive income product for members’ retirement’ (CIPR). According to the submission this reform will “encourage an income drawdown culture,” make retirement choices easier for those “overwhelmed by options,” and promote the development of products to mitigate longevity risk.
Want to be kept up-to-date with SMSF and Superannuation changes, why not subscribe to our Newsletter?
This article, as with all content on this site, is for informational purposes only, and is not legal, financial, tax or other advice. Please read our Terms and Conditions of Use.