The Institute of Chartered Accountants in Australia (the Institute) has said while the superannuation system does not require a major overhaul, lack of confidence by many fund members has led to inefficiencies in the system.
As a result, the Institute's submission to the second phase of the Cooper review has recommended that education, an increase in financial literacy, and the ability of fund members to obtain accurate, timely and meaningful information would restore confidence and foster re-engagement in the superannuation industry.
"By re-engaging members in the system, apathy will turn to action and superannuation funds will need to be more diligent and proactive about meeting member demands," the Institute's head of superannuation Liz Westover said.
"This will be the driver of market forces in the industry that will deliver greater efficiencies."
Westover said financial literacy was only valuable if superannuation fund members had access to meaningful information, including audited accounts.
"Currently, there is no requirement for superannuation funds to report to members if financial statements have been qualified by the auditor of the fund, unless a member specifically asks for a full copy of the statutory accounts - this is a significant flaw in the legislation," she said.
"Superannuation funds should be required to publicly disclose the full set of audited financial statements, including any qualifications by the auditor, so that members are fully informed about their fund."
In its submission, the Institute also called for a review into salary sacrifice arrangements, to ensure employers do not bypass their 9 per cent superannuation guarantee obligations.
