Government's superannuation package likely to cause consumer harm without substantial changes
The Government's Your Future Your Super legislation – introduced into Parliament today – will not achieve its objectives and may cause consumer harm, the Australian Institute of Superannuation Trustees (AIST) warned today.
AIST CEO Eva Scheerlinck said while AIST supported the intent of the legislation – to address underperformance and multiple accounts – the bill stopped well short of addressing underperformance across the super sector and, in doing so, risked consumers being stuck in dud funds under a proposed 'stapling' measure.
"If stapling occurs before underperformance is substantially addressed, members who are currently in underperforming funds will be stapled to those funds," Ms Scheerlinck said.
Noting that the bill failed to effectively implement Productivity Commission or Royal Commission recommendations, AIST is calling for substantial amendments to key measures, including that stapling be delayed until underperformance is substantially addressed.
AIST is also concerned that the bill lacks important detail and provide the Government with the power to ban any super fund investment or expenditure, regardless of whether it is in members' bests interests.
"This is an extraordinary overreach of power with no precedent in this country," Ms Scheerlinck said. "This change removes the certainty needed for long-term investing and risks significant impact on investment outcomes for members."
AIST says the bill should be sent to the Senate for a substantial review.
"The risk of rushing the bill through Parliament without a sufficient evidence base is heightened by the fact that the bill leaves much of the detail to regulations. This makes it very difficult for Parliament to evaluate the potential implications of what they are considering. A committee process would assist Parliament to manage some of these risks."
