Draft super efficiency and competitiveness report released

Productivity Commission, draft report: How to Assess the Competitiveness and Efficiency of the Superannuation SystemThe Productivity Commission has released the draft report: How to Assess the Competitiveness and Efficiency of the Superannuation System.

The Commission says the report includes a “proposed framework to assess the efficiency and competitiveness of Australia’s $2 trillion superannuation system”.

“Our superannuation system is large, complex and has broad reach. This means even small system improvements can offer significant financial benefits to Australian workers, particularly in their retirement.” Read more...

Industry Super welcomes draft Productivity Commission super report

Industry Super Australia, Productivity Commission, draft report: How to Assess the Competitiveness and Efficiency of the Superannuation SystemIndustry Super Australia has welcomed the way in which the Productivity Commission plans to assess the efficiency and competitiveness of the Australian superannuation system, with the release of its draft report.

“Looking after the compulsory super savings of Australians requires funds to be of the highest quality and exhibit undivided loyalty to members. Today’s report identifies that member outcomes, measured by net returns and ultimately how much they have in retirement, have to be the primary focus of a well-designed super system,” said David Whiteley, Chief Executive of Industry Super Australia. Read more...

Super funds focusing on comparisons not long term returns

superannuation funds, investment returns, comparisons, ‘league tables’, Productivity Commission inquiry into superannuation competition and efficiency, submission, CPA AustraliaSuperannuation funds are focussing on appearing favourable compared to competitors rather than on long term returns for members, CPA Australia has claimed.

CPA Australia made the claim in a submission to the Productivity Commission inquiry into superannuation competition and efficiency.

“Many superannuation funds appear to be constructing and managing their asset allocations so they can be compared against their peers on ‘league tables’, creating a focus on short-term investment performance to the possible detriment of long-term retirement outcomes for their members,” says the CPA Australia submission. Read more...

Better disclosure will improve super system efficiency: AIST

AIST, Productivity Commission inquiry into superannuation competitiveness and efficiency, objectives of superannuationThe superannuation system can be made more efficient through improved consumer disclosure and conflict of interest management, according to the Australia Institute of Superannuation Trustees (AIST).

AIST has told the Productivity Commission that “more consistent and meaningful consumer disclosure, together with strengthened conflict of interest management, would improve super system efficiency”.

The Productivity Commission is conducting an inquiry into superannuation competitiveness and efficiency, part of the Government response to the recommendations of the Financial System Inquiry. Read more...

PwC calls for review of SMSFs, consider change of regulator

Productivity Commission study of Superannuation Competitiveness and Efficiency, issues paper, submission, PwC, regulator of SMSFs, ATO, ASIC, APRAPricewaterhouseCoopers (PwC) has recommended the Productivity Commission conduct a review into SMSFs, including considering changing the regulator from the ATO to ASIC or APRA.

“The recent, rapid growth in the popularity of SMSFs has meant that they now form a significant part of the superannuation system,” said PwC in a submission to the Productivity Commission study of Superannuation Competitiveness and Efficiency.

“We would encourage the Productivity Commission to undertake a review into this area, with a specific view to considering the adequacy of SMSF consumer protections.” Read more...

Submission: Superannuation Competitiveness and Efficiency

Productivity Commission Superannuation Competitiveness and Efficiency issues paper, submission, SMSFThis is a submission in response to the Productivity Commission Superannuation Competitiveness and Efficiency issues paper.

Thank you for the opportunity to make a submission in response to the Superannuation Competitiveness and Efficiency Issues Paper. This submission will deal with two questions posed by the Issues Paper relating to SMSFs:

  • To what extent do different data reporting formats make it difficult to compare SMSFs and APRA-regulated funds, and hence to assess the performance of the superannuation system as a whole?
  • How would you measure the extent of competitive pressure from the SMSF segment on the rest of the superannuation system?

While there may be difficulties in comparing data collected from SMSFs and APRA-regulated superannuation funds I would be wary of imposing a greater reporting burden on SMSFs. SMSFs are not prudentially regulated and the data available comes from what is collected by the ATO, largely for tax purposes. Increasing the reporting requirements on SMSFs would increase the costs on a large, growing and important sector of superannuation. Read more...

Productivity Commission super review will create uncertainty

Productivity Commission review inquiry into superannuation will create uncertaintyThe reviews by the Productivity Commission into competition in the superannuation sector and the default fund process are unnecessary and “will create uncertainty,” says Olivia Long, CEO of SMSF administrators Xpress Super and SuperGuardian.

“In theory it seems like a good idea to get the Productivity Commission to undertake a study to develop criteria to assess the efficiency and competitiveness of the superannuation system, and have a public inquiry to develop alternative models for a formal competitive process to allocate default fund members to products.” Read more...