Government must hold its nerve to push through changes
CHOICE welcomes the government’s latest response to the Cooper review into superannuation as they will mainly be positive for consumers and herald a new era in retirement savings.
The consumer group says MySuper will deliver immediate benefits for 70-80% of super members, and SuperStream will tidy up lost and multiple accounts - a long overdue reform that will save consumers billions of dollars in fees.
Improvements to superannuation which CHOICE supports include:
- MySuper benefits meaning simpler standards to compare products
- Stronger rules for quality of default funds
- Significant reduction in fees and removal of unnecessary services such
as advice which was never used
“Generally it’s a great job with some of the response going even further than the Cooper review to improve the super system. It shows the way forward for
reform in the banking sector, where we are also urging action on unfair fees, portability of account numbers and an end to conflicts of interest in sales. Now it’s up to the government to hold its nerve when it comes to implementation,” says CHOICE Better Banking campaign director, Richard Lloyd.
“CHOICE will also be seeking some further improvements and resources for consumer bodies to help balance the dominance of business interests in the super industry, and in particular to see the proposed Future of Financial Advice reforms ensure strong protection for consumers."
CHOICE would like to see an overall fee target set for all super funds, not just MySuper; 20-30% of consumers will not be in MySuper and their protection from fee gouging and commissions relies on strong protections of which are still the subject of debate in the Future of Financial Advice consultations.
Additionally the government needs to act to strengthen the complaints system and the representation of member interests such as a dedicated and funded consumer body.
Any consideration of post retirement products such as a post retirement MySuper equivalent, have been postponed to an unspecified future date. CHOICE believes this is another important and urgent issue.
“The response lists more than 20 committees, guidelines, codes and standards that all require consumer representation and input in the next two years, and there are no resources allocated for this at the moment. We believe the government recognizes this gap and expect they will act soon,” says Richard Lloyd.