Financial Services Council (FSC)
In response to claims by Industry Super Australia that recent reviews of the superannuation system had supported the current system for choosing default superannuation funds the Financial System Inquiry has written a letter to the editor of The Australian:
Re: End default super battle, retail funds told
Industry Super Australia’s claim that “a series of reviews had already endorsed existing arrangements” for default superannuation under Modern Awards is wrong. (”End default super battle, retail funds told”, The Australian, February 5). The reviews have in fact been critical of the role of the Fair Work Commission in selecting default funds.
Industry Super Australia CEO David Whiteley says the superannuation sector is at a “crossroads.”
“The banks are lobbying hard to scrap the safety net and replace it with a system designed to suit their vertically-integrated business model, which is geared towards profits and dividends to shareholders.”
Industry Super Australia Chief Executive David Whiteley has used a speech to the National Press Club to argue that the superannuation safety net is under threat.
The National Press Council on Wednesday was the latest forum for the continuing fight between the Financial Services Council and Industry Super Australia over default superannuation funds.
Opening the speeches David Whiteley said that “the heart of our super system has been the default super safety net.”
Titled Financial performance of Australia’s superannuation products, the report was recently released by the Financial Services Council.
According to the report “Australia’s system appears to be ‘middle of the pack’” compared to overseas pension systems. The analysis included twelve pension systems worldwide and found that “Australia has the third highest returns”.
John Brogden, CEO of the Financial Services Council, has announced that the FSC is going to begin work on a national retirement income policy.
“We must embrace the opportunity and lead the debate on taking superannuation from a world class accumulation scheme to the world’s best retirement system”, said Mr Brogden.
He went on to say that the superannuation system must not only provide an income in retirement to “a majority of Australians”, it must also take “intergenerational pressure off the budget”. If the super system fails to achieve these goals the “system and policy has failed”.
The FSC plans to work with “our members, business leaders, community organisations and others” to develop a policy, called the “National Retirement Outcomes Policy”.
Martin Spedding, CEO of DST Bluedoor, said in the 14th annual FSC-DST CEO Survey that:
“Preparing for MySuper, SuperStream and FoFA has been disruptive and costly, diverting resources and attention away from other more productive areas. As this implementation phase nears its end-point, the industry’s leaders are re-focusing on the opportunities of the future.”
However there are impediments to introducing something new, with 42% of respondents saying they were unable to release a new product or process due to regulation.