The SMSF Association (SMSFA) says it has “put its weight” behind Government proposals to expand employee choice of superannuation funds, saying it will increase member engagement and improve efficiency and competition in the super system.
SMSFA CEO Andrea Slattery said employees should have the right to choose which super fund receives their contributions, as it is forgone salary and wages.
“Giving people the right to choose where their superannuation contributions are made will give them the opportunity to become more engaged and informed about their retirement savings. It will allow them to select a superannuation fund that they believe best suits their circumstances and retirement savings goals,” she said.
“For those who do not want to exercise choice, default MySuper fund arrangements will cater for their needs.”
Slattery said expanding super fund choice will improve efficiency in the system by reducing the number of accounts, with most people believed to have three separate superannuation accounts currently.
“This will help reduce the amount of fees and insurance premiums deducted from an individual’s superannuation, boosting their retirement income over the long term.”
“In addition, allowing all employees choice will reduce the need for people to transfer funds from their default fund account to their account of choice (such as an SMSF, retail fund or another industry fund), minimising costs and complexity.”
“Choice of fund will also ensure that all funds are on a level playing field in acquiring and retaining members, ensuring healthy competition in the market place that will drive better outcomes for members.
“Under the present system many employees are ‘trapped’ in their default fund and can’t leave if they are unhappy with their fund’s fees or performance.”
“Allowing fund choice for these employees will ensure that they can find a fund that meets their needs, increasing competition, a positive outcome for the superannuation sector to ensure it meets its primary objective to provide retirement savings for all Australians.”
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.