Under 25s should have a single default super fund: Rice Warner

Rice Warner has called for a shake up of default superannuation for people aged under 25 to help reduce erosion of their savings due to a lack of engagement.

Rice Warner says, in a submission to the Productivity Commission inquiry into alternative models for setting default super funds, that people aged under 25 shouldn’t go into ordinary default super funds. Instead, in the future, when people 24 and younger first start getting super it should be placed with the ATO for record keeping and then invested with the Future Fund, or appropriate alternatives. Read more...

FSC welcomes “refreshing” approach towards default super competition

The Financial Services Council has welcomed the “refreshing approach” the Productivity Commission has taken towards competition in setting default superannuation funds.

The Productivity Commission is conducting an inquiry to develop alternative models for determining default super funds.

“Australia has a world leading superannuation system, however it can be improved through reforms to enhance the competitiveness and the efficiency of the system,” says the Financial Services Council (FSC) submission to the inquiry. Read more...

Alternative default super inquiry is focussing on “inferior models”: ISA

The Productivity Commission should focus on the world’s best retirement income systems instead of “inferior models”, says Industry Super Australia.

The Productivity Commission is currently developing alternative models to set default superannuation funds. Several industry super funds have made submissions to the inquiry in support of the current system.

Industry Super Australia says the retirement income systems of Denmark, the Netherlands and Australia currently occupy the top three spots in Mercer’s 2016 Global Pension Index. However Chile, ranked 8, and New Zealand, which is not ranked, are “being held up as exemplars in the Productivity Commission’s review process”. Read more...

Industry funds ask if default super changes are ideologically motivated

Industry super funds say the existing system for choosing default super funds is working well and ask if the potential move to a competitive model is ideologically motivated.

The Productivity Commission is conducting an inquiry into alternative models for choosing default super funds. However a submissions from industry super funds support the current system.

“The superannuation system is functioning well and leading to better retirement outcomes for Australian workers. There is little to be gained and much to be lost by continuing to tinker with a system that is not broken,” said Vision Super, in its submission. Read more...

Small employers shouldn’t have to choose default super funds: Mercer

Smaller employers should not have to choose default super funds for employees, Mercer has told the Productivity Commission.

The Productivity Commission is conducting an inquiry into alternative models for setting default super funds. The consulting firm Mercer, in its submission to the inquiry, says it is “essential” that larger employers – 20 or more employees – be responsible for selecting default funds, but this should not extend to small employers.

“This obligation is consistent with the entity’s obligations as an employer and recognises that many large employers have the resources to conduct tenders for customised MySuper offerings with lower fees and, where appropriate, insurance arrangements designed specifically for their employees,” says the Mercer submission. Read more...

Default super fund inquiry must put interests of members first

Organisations representing superannuation funds have called on the Productivity Commission to put the interests of super fund members first in designing a default super fund model.

The Productivity Commission is currently conducting an inquiry to develop alternative models to choose default super funds.

However Industry Super Australia and the Australian Institute of Superannuation Trustees (AIST) have come out in support of the current Fair Work Commission process.

“A safety net of the best performing funds is required to protect the interests of the estimated eight million Australians who rely on their employer’s choice of default fund,” said David Whiteley, Chief Executive of Industry Super Australia. Read more...

Alternative default superannuation models issues paper released

The Productivity Commission has started the process of developing alternative ways to allocate super fund members to default funds with the release of an issues paper.

The Government tasked the Commission with developing alternative default superannuation fund systems – with one option being a tender process to set a single default super fund.

“Importantly, the emphasis is on developing alternative models. This inquiry is not a review of MySuper or other current default arrangements. In assessing alternative allocative models, this inquiry will therefore be starting from an objective baseline scenario of no defaults,” says the Productivity Commission Issues Paper Superannuation: Alternative Default Models. Read more...

PC sets groundwork for long-awaited look at super competition and efficiency

The Conversation, Productivity Commission sets groundwork for long-awaited look at super competition and efficiency The Productivity Commission has released its draft report setting out criteria for assessing the competitiveness and efficiency of the superannuation system. The final report will be delivered in November this year.

The study, the first stage of a three-stage exercise, is part of the Government’s response to the 2014 Murray Financial System Inquiry. Murray recommended that the Government “introduce a formal competitive process to allocate new default fund members to MySuper products, unless a review by 2020 concludes that the Stronger Super reforms have been effective in significantly improving competition and efficiency in the superannuation system.” Read more...

A competitive superannuation system: will efficiency gains follow?

The Conversation, A competitive superannuation system: will efficiency gains follow? Productivity Commission Will competition in the superannuation system improve efficiency, or is this an ideological argument extended beyond its usefulness? If more competition would promote efficiency, what design and policy issues need to be addressed to accommodate the changes?

The Productivity Commission’s draft report on superannuation’s efficiency and competitiveness seeks to address whether increased competition will, in fact, drive efficiency, or whether this proposal is ideologically driven by either a belief in the free market or a desire to weaken the role of the unions in industry superannuation funds. Read more...

Productivity Commission doesn’t call for additional SMSF reporting

Productivity Commission, efficiency and competitiveness in the superannuation system, How to Assess the Competitiveness and Efficiency of the Superannuation SystemThe Productivity Commission has not called for additional reporting requirements to be imposed on SMSFs as part of its review of the superannuation sector.

The Government tasked the Productivity Commission with conducting an inquiry into the efficiency and competitiveness of the superannuation system.

The Commission has now released the draft report: How to Assess the Competitiveness and Efficiency of the Superannuation System. The report says: “At this stage, the Commission does not propose any additional collection of information on the SMSF sector to apply the criteria and indicators proposed in this study.” Read more...