Super is your money, choice should be expanded: Minister

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choice of superannuation fund, trade union royal commission, superannuation fund governanceKelly O’Dwyer, the Assistant Treasurer and Minister for Small Business, has argued that choice of super fund should be expanded to more employees.

“At the moment, there are around about 20,000 enterprise bargaining agreements, covering around about 40 per cent of Australia’s workforce. 26 per cent of those allow individuals no choice whatsoever in relation to their superannuation fund,” said Minister O’Dwyer.

“This is significant because at the end of the day, your superannuation is your money. The Government mandates you putting it into a superannuation fund and you should be able to say where that money goes. So the Government is going to make changes to allow you to make the choices that are right for you and your retirement future because who else is better placed to make those decisions?”

“The Government is also very keen to see higher standards in our superannuation industry – world best governance standards – the reason for this is that we have seen examples in the past, in fact, in the not too distant past, which has seen the breach of members’ information as was illustrated through the recent royal commission and if you had better governance standards, you could say that these sorts of situations would be much less likely to happen.”

A bill to change the governance arrangements of large superannuation funds was scheduled to be voted on in the Senate late in 2015, but was delayed when it seemed the Government lacked the votes.

When asked why these laws are being introduced given the performance record of industry super funds Minister O’Dwyer said: “We want to make sure that individuals have choice around their fund.”

“Enterprise bargaining agreements and workplace determinations dictate to individuals where their money goes in superannuation. What this means, for around about 25 per cent of those people who are covered by an enterprise agreement is that they have no choice in where their money goes. It means they are paying two lots of fees, they’re paying in the case of those who have got two funds for instance, it means they might be paying two insurance premiums as well, rather than being able to bundle that together and put it into one fund.”

Asked about concerns that retirees were passing retirement savings to their children rather than spending it to fund their own retirement the Minister said: “I think it’s up to the individual as to how they spend their retirement income. It’s certainly not for the Government to dictate how they spend their own money that they’ve earned.”

“What the Government wants to do is to make sure that we maximise the income that’s available for people in their retirement. We want to make sure that they are in the driving seat, that they can make the decisions about their retirement future. The Government’s not there to dictate to them how they should spend their money, or how much money they should have,” said Minister O’Dwyer.

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