Productivity Commission wants to hear from SMSF members

The Productivity Commission says it wants to hear from super fund members, including members of SMSFs.

The Productivity Commission has released the issues paper as part of its Inquiry into the Competitiveness and Efficiency of the Superannuation System. This is the third and final stage of the inquiry into the superannuation system, which followed from recommendations of the Financial System Inquiry.

Related: Government starts third and final part of PC super system review

“The sheer size of the superannuation system, with more than $2 trillion of Australian assets, combined with its compulsory nature, highlights the importance of this Inquiry,” said the Productivity Commission. Read more...

Government starts third and final part of PC super system review

The Government has started the third and final part of the Productivity Commission’s review of the efficiency and competitiveness of the superannuation system.

“The Turnbull Government has taken further action to ensure Australia’s superannuation system is as efficient and competitive as possible with the release of the Terms of Reference for the Productivity Commission’s system wide review,” said a joint statement by Treasurer Scott Morrison and Minister for Revenue and Financial Services Kelly O’Dwyer. Read more...

Vast majority want default super funds to return profits to members

The vast majority of Australians, 91%, believe that default superannuation funds should return all profits to members. This is the finding of a poll by Essential Media, conducted for the Australian Institute of Superannuation Trustees (AIST).

AIST CEO Eva Scheerlinck said the poll showed that the public wants a default superannuation system that values members, not shareholders.

“First and foremost, our default super fund system must ensure that members’ interests are protected,” said Ms Scheerlinck. Read more...

Under-performing super funds should lose default status: AIST

Under-performing superannuation funds should lose their default fund status, the Australian Institute of Superannuation Trustees (AIST) has told the Productivity Commission.

AIST told the Commission, in a public hearing into alternative models for setting default super funds, that long-term under-performing default funds should lose that status.

AIST CEO Eva Scheerlinck also called for better regulation to help consumers compare net performance between super funds. AIST has supported the publication of net benefit league tables of super funds by APRA. Read more...

Industry funds would still top list under Productivity Commission models

Industry super funds are likely to still be favoured under alternative models for selecting default super funds, due to their performance.

The Productivity Commission recently released its draft report into alternative models for selecting default super funds. The report has been criticised by Industry Super Australia and other superannuation industry bodies as opening up the default super fund process to retail – bank-owned – super funds.

However an analysis by SuperRatings finds that industry super funds are still likely to be favoured by the alternative models suggested by the Productivity Commission. Read more...

Everyone is “really sick” of super industry groups: Minister O’Dwyer

Everyone is sick of the superannuation industry groups, says Minister for Revenue and Financial Services Kelly O’Dwyer.

Minister O’Dwyer was asked on 2GB if the recently released draft Productivity Commission report into alternative models for setting default super funds was broader than industry vs retail funds.

“Well exactly right, and I think everyone is frankly really sick of industry groups, and by that I’m talking about superannuation industry broadly, fighting one another about their own vested interests,” answered Minister O’Dywer. Read more...

Productivity Commission proposes four ways to revamp default super funds

It would be possible for a person to have a single default super fund in their lifetime, instead of having multiple default funds as they change employers, under models developed by the Productivity Commission.

The Productivity Commission was tasked by the government with developing alternative models for setting default super funds. The Commission has now released its draft report, containing four default super fund models.

“After 25 years, and notwithstanding a history of reasonable returns as a general rule, structural faults are evident in default superannuation,” said Productivity Commission Chair, Peter Harris. Read more...

Tender process for default super “solution looking for a problem”: ASFA

The Association of Superannuation Funds of Australia (ASFA) says a Chilean-style tender process for selecting default superannuation funds is a solution looking for a problem.

ASFA has released a research paper on the Chilean tender process for pension funds, at a time when the Productivity Commission is considering such a model as one of the alternatives for allocating members to default super funds.

ASFA says the research “shows the adoption of a Chilean-style tender process for default super in Australia would be a solution looking for a problem that doesn’t exist and have adverse effects on member outcomes”. Read more...

Industry concerned by cost of super system efficiency framework

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. Read more...

ASIC warns about issues with employers choosing default super funds

ASIC has warned about the issues with employers choosing default super funds for employees, including around incentives and the offering of inducements.

“Although employers currently have the legal responsibility to make a decision in relation to the default superannuation product, employers are required to neither select a fund that is in the best interests of their employees nor to put their employees’ interests ahead of their own in selecting the fund,” said ASIC in it’s submission to the Productivity Commission. The Commission is conducting an inquiry to determine alternative models for setting default super funds. Read more...